The Conservatory North Palm Beach. Hydroponic Garden 3300 FOREST HILL BOULEVARD WEST PALM BEACH, FLORIDA

The Conservatory School @ North Palm Beach Hydroponic Garden 3300 FOREST HILL BOULEVARD WEST PALM BEACH, FLORIDA

SCHOOL DISTRICT OF PALM BEACH COUNTY FISCAL YEAR 2015 SCHOOL BOARD MEMBERS MIKE MURGIO DISTRICT 1 CHUCK SHAW DISTRICT 2 KAREN M. BRILL DISTRICT 3 ROBERT AVOSSA, Ed.D. SUPERINTENDENT ERICA WHITFIELD DISTRICT 4 FRANK A. BARBIERI, JR., ESQ. VICE CHAIRMAN DISTRICT 5 MARCIA ANDREWS DISTRICT 6 DEBRA L. ROBINSON, M.D. DISTRICT 7

COMPREHENSIVE ANNUAL FINANCIAL REPORT The School District of Palm Beach County, Florida for the Fiscal Year Ended June 30, 2015 Issued by: Robert M. Avossa, Ed.D., Superintendent of Schools Michael J. Burke, Chief Operating Officer Prepared by: Division of Financial Management Nancy Samuels, C.P.A., Director of Accounting The School District of Palm Beach County 3300 Forest Hill Boulevard West Palm Beach, Florida 33406

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2015 TABLE OF CONTENTS INTRODUCTORY SECTION Letter of Transmittal GFOA Certificate of Achievement ASBO Certificate of Achievement Organizational Chart - School Year 2014 / 2015 Principal Officials - Non-Partisan Elected Principal Officials - June 30, 2015 Page i vi vii ix x xi FINANCIAL SECTION A. Independent Auditors' Report 1 B. Management s Discussion and Analysis (Unaudited) 3 C. Basic Financial Statements Government-Wide Financial Statements Statement of Net Position 15 Statement of Activities 16 Fund Financial Statements Governmental Funds Financial Statements Balance Sheet 18 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position 21 Statement of Revenues, Expenditures, and Changes in Fund Balances 22 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 26 Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - General Fund 27 Proprietary Fund Financial Statements Statement of Net Position 29 Statement of Revenues, Expenses, and Changes in Fund Net Position 30 Statement of Cash Flows 31 Fiduciary Fund Financial Statements Statement of Fiduciary Net Position 32 Statement of Changes in Fiduciary Net Position 33 Notes to the Financial Statements: 1. Summary of Significant Accounting Policies 34 2. Ad Valorem Taxes 42 3. Cash, Cash Equivalents and Investments 43 4. Investment Derivative Instruments 46 5. Due From Other Governments or Agencies 46 6. Interfund Activities 46

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2015 TABLE OF CONTENTS FINANCIAL SECTION (continued) Page 7. Capital Assets 47 8. Risk Management 48 9. Short Term Debt 48 10. Long-Term Liabilities 49 11. Derivative Instruments 58 12. Retirement Plans 60 13. Post Employment Benefits Other Than Pensions 68 14. Net Position and Fund Balance Reporting 71 15. Commitments and Contingencies 74 16. Subsequent Events 74 D. Required Supplementary Information Schedule of Funding Progress - Other Post Employment Benefits Plan 76 Schedule of District's Proportionate Share of the Net Position Liability - FRS 77 Schedule of District's Contributions - FRS 77 Schedule of District's Proportionate Share of the Net Position Liability - HIS 77 Schedule of District's Contributions -HIS 77 E. Combining and Individual Fund Statements and Schedules Non-Major Governmental Funds Combining Balance Sheet 82 Combining Statement of Revenues, Expenditures and Changes in Fund Balances 84 Combining Statement of Net Position - Internal Service Funds 88 Combining Statement of Revenues, Expenditures and Changes in Net Position - Internal Service Funds 89 Combining Statement of Cash Flows - Internal Service Funds 90 Budgetary Comparison Schedules - Other Major and Non-Major Governmental Funds Major Funds COPS Debt Service 91 Capital Improvement 92 Non-Major Funds Food Service 93 Other Special Revenue Fund 94 Federal Economic Stimulus Programs 95 SBE/COBI Bonds 96 Debt Service - Buses and Equipment 97 ARRA QSCB 98 COBI Bonds 99 CO & DS 100 Sales Tax 101 Capital - Buses and Equipment 102 COPS 103 Other Capital Projects 104 Agency Fund Statement of Changes in Assets and Liabilities 105 F. Other Supplementary Information Long Term Liabilities Schedule of Debt Service Requirements to Maturity - Bonds and Lease Payable and Obligations Under Lease Purchase Agreements 108 Schedule of Bonds and Lease Payable and Obligations Under Lease Purchase Agreements 110

STATISTICAL SECTION (Unaudited) THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2015 TABLE OF CONTENTS Table Page Financial Trends: Net Position by Component 1 116 Expenses, Program Revenues and Net (Expense)/Revenue 2 118 General Revenues and Total Changes in Net Position 3 120 Fund Balances, Governmental Funds 4 122 Governmental Funds Revenue 5 124 Changes in Fund Balances - Governmental Funds 6 126 Ratio of Debt Service to Non-Capital Expenditures 7 128 Revenue Capacity: Assessed and Estimated Actual Value of Taxable Property 8 129 Property Tax Levies and Collections 9 130 Property Tax Rates Per Thousand of Assessed Valuation All Countywide Direct and Overlapping Governments 10 132 Property Tax Levies - All Countywide Direct and Overlapping Governments 11 134 Debt Capacity: Ratio of Outstanding Debt by Type 12 137 Computation of Legal Debt Margin 13 138 Ratio of Net General Bonded Debt to Assessed Value and 14 140 Net Bonded Debt Per Capita Current Debt Ratios and Bonded Debt Per Capita of Palm Beach County Computation of Direct and Overlapping Debt 15 141 Ratio of Annual Debt Service Expenditures for General Bonded Debt to Total General Fund Expenditures 16 142 Pledged Revenue Coverage 17 143 Demographic and Economic Information: Demographic Statistics 18 145 Principal Taxpayers and Ten Largest Private Employers 19 146 Property Value of Building Permits Issued, Construction and Bank Deposits 20 148 Comparative Enrollment Trends - Fifteen Largest School Districts 21 150 Labor Force Estimates 22 153 Employment Distribution by Major Industry 23 154 Operating Information: School Food Service Operating Data 24 156 Schedule of Insurance in Force 25 158 Teachers' Salaries 26 165 Full Time Staff by Assignment 27 166 Operating Statistics 28 168 Building Information 29 169 Miscellaneous Statistical Data 30 179

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Association of School Business Officials International The Certificate of Excellence in Financial Reporting Award is presented to The School District of Palm Beach County For Its Comprehensive Annual Financial Report (CAFR) For the Fiscal Year Ended June 30, 2014 The CAFR has been reviewed and met or exceeded ASBO International s Certificate of Excellence standards Terrie S. Simmons, RSBA, CSBO President John D. Musso, CAE, RSBA Executive Director

School District of Palm Beach County School year 2014-2015 Students, Parents & Community of Palm Beach County School Board Superintendent of Schools General Counsel to the School Board Inspector General Advisory Committees Audit Academic (AAC) Advisory Boundry Council (ABC) Budget Construction (CORC) Diversity & Equity ESE Finance Independent Referendum Oversite Committee (IROC) Referendum Oversight Sales Tax (ISSOC) Technology (TAC) Technical Advisory Group (TAG) Chief Academic Officer Compliance Chief Communications & Engagement Officer Chief Operating Officer Legislative Liaison ix Teaching & Learning Area 1 Educational Alternatives & Intervention Performance Accountability Human Resources Labor Relations Budget Information Technology Support Operations Elementary Education Area 2 Choice & Career Options Research Eval Recruitment & Retention School Police Accounting Infrastructure, System Support, & Security Transportation Services Secondary Education Area 3 Charters Educational Technology Professional Standards Treasury IT Enterprise Applications School Food Service Early Childhood Education Area 4 Education Alternatives Assesment Compensation and Employee Services FTE & Student Reporting Technical Operations Maintenance and Plant Operations Federal Programs Area 5 After School Programming Professional Development Purchasing/ ERP Planning & Intergovernmental Relations Program Management ESE Multiculture Transformation I Transformation II Safe Schools Adult Ed Risk & Benefits Management Diversity in Business Practices Environmental & Conservation Services Building Code Services Virtual Schools Leadership Development

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA PRINCIPAL OFFICIALS - NON-PARTISAN ELECTED BOARD MEMBERS - TERMS OF OFFICE Mr. Mike Murgio Member from District 1 Present term expires November 2016 Mr. Chuck Shaw, Chairman Member from District 2 Present term expires November 2016 Mrs. Karen M. Brill Member from District 3 Present term expires November 2018 Mrs. Erica Whitfield Member from District 4 Present term expires November 2018 Mr. Frank Barbieri, Jr., Esq. Vice Chairman Member from District 5 Present term expires November 2016 Mrs. Marcia Andrews Member from District 6 Present term expires November 2018 Debra L. Robinson, M.D. Member from District 7 Present term expires November 2018

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA PRINCIPAL OFFICIALS-APPOINTED JUNE 30, 2015 Robert M. Avossa, Ed.D. Keith Oswald JulieAnn Rico, Esq. Michael J. Burke Vacant Lung Chiu Superintendent Chief Academic Officer Chief Counsel to the School Board Chief Operating Officer Chief Communications & Engagement Officer Inspector General

Independent Auditor s Report To the Chairperson and Members The School District of Palm Beach County, Florida West Palm Beach, Florida Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of The School District of Palm Beach County, Florida (the District), as of and for the year ended June 30, 2015, and the related notes to the financial statements, which collectively comprise the District s basic financial statements as listed in the table of contents. Management s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall financial statement presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of the School District of Palm Beach County, Florida, as of June 30, 2015, and the respective changes in financial position and, where applicable, cash flows thereof and the respective budgetary comparison for the general fund for the year then ended in accordance with accounting principles generally accepted in the United States of America. 1

Emphasis of Matter As discussed in Note 1 to the accompanying financial statements, the District adopted the recognition and disclosure requirements of Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions, an Amendment of GASB Statement No. 27 and Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date, an amendment of GASB Statement No. 68, effective July 1, 2014. The net position balance of the governmental activities as of July 1, 2014, has been restated. Our opinion is not modified with respect to this matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management s discussion and analysis, Schedule of Funding Progress Other Post-Employment Benefits Plan, Schedule of the District s Proportionate Share of the Net Pension Liability FRS, Schedule of District Contributions FRS, Schedule of the District s Proportionate Share of the Net Pension Liability HIS, and Schedule of District Contributions HIS, as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the District s basic financial statements. The introductory section, combining and individual non-major fund financial statements and schedules, and statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual non-major fund financial statements and schedules are the responsibility of management and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the accompanying combining and individual non-major fund financial statements and schedules are fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued, under separate cover, our report dated December 9, 2015, on our consideration of the District s internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts, grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District s internal control over financial reporting and compliance. West Palm Beach, Florida December 9, 2015 2

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA MANAGEMENT S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 The School District of Palm Beach County, Florida s (the District ) discussion and analysis is designed to provide an objective and easy to read analysis of the District s financial activities for the fiscal year ended June 30, 2015, based on currently known facts, decisions or conditions. It is intended to provide a broad overview using a short-term and long-term analysis of the District s activities based on information presented in the financial report and fiscal policies that have been adopted by the seven elected members of the school board (the Board ). Specifically, this section is designed to assist the reader in focusing on significant financial issues, provide an overview of the District s financial activity, identify changes in the District s financial position (its ability to address the next and subsequent year challenges), identify any material deviations from the financial plan (the approved budget) and identify individual fund issues or concerns. As with other sections of this financial report, the information contained within this MD&A should be considered only a part of a greater whole. The reader of this statement should take time to read and evaluate all sections of this report, including the notes that are provided in addition to this MD&A. FINANCIAL HIGHLIGHTS Implementation of Governmental Accounting Standards Board Statement No. 68, Accounting and Financial Reporting for Pensions an Amendment of GASB Statement No. 27 reduced beginning net position by $648.5 million as explained further in Note 1 (O). The net position of the District increased $0.017 billion from $1.226 billion to $1.263 billion. Funding per student has slowly increased since the low point in school year 2011-12, although it has still not recovered to school year 2007-08 levels. The increase is partially related to a net pension credit to expense of $34.2 million related to the newly adopted GASB #68 offset in part by the increase in the amount passed through to charter schools in Palm Beach County of $22.1 million from $112.6 million to $134.7 million in fiscal year 2015. Enrollment at district schools remained constant (while charter school enrollment increased approximately 3,200 students). The District s total long-term debt decreased by $68.5 million or 3.6% primarily due to debt repayments of $74.8 million and refunding / defeased transactions, offset by an increase in negative fair value of hedging derivative instruments of $6.7 million (discussed in Notes 10 and 11). Total revenues increased by $51.3 million or 2.8%, from $1.831 billion to $1.883 billion when compared to the prior year. o o General revenue accounted for $1.338 billion, or 71.1%, of all revenues and increased $45.8 million or 3.5%. This increase is primarily attributed to property tax increase of $82.3 million (mainly due to 8.2% increase in property values) partially offset by a $24.3 million decrease in the Florida Education Finance Program (FEFP) revenue and a $8.3 million decrease in impact fees. Program specific revenue in the form of charges for services, grants and contributions accounted for $544.2 million, or 28.9% of all revenues and increased $5.5 million or 1.0%. The increase is primarily attributed to an increase in reimbursements for school lunch and breakfast programs and additional funding for Class Size Reduction. Total expenses decreased $49.4 million from $1.914 billion to $1.865 billion. The decrease in expenditures is due primarily to $34.2 million credit to pension expense related to GASB #68 reporting, $32.9 million lower interest expense mainly related to a one-time SWAP payment of $25 million in prior year as well as refunding transactions, partially offset by an increase in the amount passed through to charter schools of $22.1 million. 3

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA MANAGEMENT S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 The District s governmental funds reported combined fund balances of $326.5 million. o o o The General Fund (the primary operating fund), reflected on a current financial resources basis, ended the year with a fund balance of $117.1 million. Of this amount, $50.0 million is classified as unassigned that is available to cover unanticipated financial needs and includes the Board approved contingency, $30.0 million is classified as assigned, $28.1 million is classified as restricted and $9.0 million is classified as nonspendable. During the current year, General Fund revenues (including other financing sources) exceeded expenditures by $5.3 million, primarily due to the receipt of $4.5 million onetime funds related to the lease of the district spectrum. Debt Service funds ended the year with a fund balance of $94.8 million and is restricted to cover debt service payments. Other Debt Service fund, a major fund, has a restricted fund balance of $92.6 million, and the remaining debt service funds which are included with the non-major governmental funds have a restricted fund balance of $2.2 million. Capital Project funds ended the year with a fund balance of $87.1 million and is restricted or assigned to fund existing and future capital projects. The Capital Improvement fund, a major fund, has a restricted fund balance of $26.0 million, and the remaining capital funds which are included with the non-major governmental funds have $23.1 million restricted fund balance and $38.0 million assigned fund balance. o Special Revenue funds ended the year with a fund balance of $27.6 million, of which $24.3 million is restricted to child nutrition costs, $3.2 million is nonspendable inventory, and $0.1 million is committed to The Education Network Program which are included with the non-major governmental funds. OVERVIEW OF THE FINANCIAL STATEMENTS This annual report consists of two parts management s discussion and analysis (this section) and the basic financial statements. The basic financial statements include two kinds of statements that present different views of the District: The first two statements are government-wide financial statements that provide both short-term and long-term information about the District s overall financial status. The remaining statements are fund financial statements that focus on individual parts of the District, reporting the District s operations in more detail than the government-wide statements. The governmental funds statements tell how basic services like instruction and instructional support services were financed in the short-term as well as what remains for future spending. Proprietary funds statements offer short-term and long-term financial information about the activities the District operates like businesses, such as group health self-insurance and long term claim self-insurance. Fiduciary funds statements provide information about the financial relationships in which the District acts solely as a trustee or agent for the benefit of others. The financial statements also include notes that explain some of the information in the statements and provide more detailed data. 4

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA MANAGEMENT S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 Scope Required financial statements Accounting basis and measurement focus Figure 1 Major Features of Government-Wide and Fund Financial Statements Government-wide Fund Financial Statements Statements Governmental Funds Proprietary Funds Fiduciary Funds Entire District (except fiduciary funds) Statement of net position Statement of activities Accrual accounting and economic resources focus The activities of the District that are not proprietary or fiduciary, such as instructional costs Balance sheet Statement of revenue, expenditures, and changes in fund balances Modified accrual accounting and current financial resources focus Activities the District operates similar to private businesses: health internal service fund and worker s compensation, automobile and general liability claims fund Statement of net position Statement of revenue, expenses, and changes in fund net position Statement of cash flows Accrual accounting and economic resources focus Instances in which the District administers resources on behalf of someone else, such as scholarship programs and student activities monies Statement of fiduciary net position Statement of changes in fiduciary net position Accrual accounting and economic resources focus Figure 1, above, summarizes the major features of the District s financial statements, including the portion of the District s activities they cover and the types of information they contain. The remainder of this overview section of management s discussion and analysis highlights the structure and contents of each of the statements. Government-wide Statements The government-wide statements report information about the District as a whole using accounting methods similar to those used by private-sector companies. The statement of net position includes all of the District s assets and liabilities. All of the current year s revenue and expenses are accounted for in the statement of activities regardless of when cash is received or paid. The two government-wide statements report the District s net position and how they have changed. Net position the difference between the District s assets, deferred outflows and liabilities is one way to measure the District s financial health or position. Over time, increases or decreases in the District s net position is an indicator of whether its financial position is improving or deteriorating, respectively. To assess the overall health of the District, the reader needs to consider additional non-financial factors such as changes in the District s property tax base and the condition of school buildings and other facilities. In the government-wide financial statements, all the District s activities are reported as governmental activities. Governmental activities All of the District s basic services are included here, such as regular and special education, transportation, and administration. Property taxes and state formula aid finance most of the activities. 5

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA MANAGEMENT S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 Fund Financial Statements The fund financial statements provide more detailed information about the District s funds, focusing on its most significant or major funds not the District as a whole. Funds are accounting devices the District uses to keep track of specific sources of funding and spending on particular programs: Some funds are required by State law and by bond covenants. The District establishes other funds to control and manage money for particular purposes (like repaying its long-term debts) or to show that it is properly using certain revenues (like federal grants). The District has three kinds of funds: Governmental funds Most of the District s basic services are included in governmental funds, which generally focus on (1) how cash and other financial assets that can readily be converted to cash flow in and out, and (2) the balances left at year-end that are available for spending. Consequently, the governmental funds statements provide a detailed short-term view that helps the reader determine whether there are more or fewer financial resources that can be spent in the near future to finance the District s programs. Because this information does not encompass the additional long-term focus of the government-wide statements, the District provides additional information with the governmental funds statements that explain the relationship (or differences) between them. Proprietary funds Services for which the District charges a fee are generally reported in proprietary funds. Proprietary funds are reported in the same way as the government-wide statements. There are two types of proprietary funds: o o Enterprise funds account for goods and services provided to those outside the District, generally on a user-charge basis. Currently, the District has no enterprise funds. Internal service funds report self-insurance activities charged to the District s other programs and activities. Fiduciary funds The District is the trustee, or fiduciary, for assets that belong to others, such as the scholarship fund and the student activities funds. The District is responsible for ensuring that the assets reported in these funds are used only for their intended purposes and by those to whom the assets belong. The District excludes these activities from the government-wide financial statements because the District cannot use these assets to finance its operations. Notes to the Financial Statements The notes provided, disclosures and additional information that are essential to a full understanding of the financial information presented in the government-wide and fund financial statements. Other Information In addition to the basic financial statements and accompanying notes, this report also provides certain required supplementary information, as well as combining and individual fund statements and schedules beginning on page 76. 6

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA MANAGEMENT S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 FINANCIAL ANALYSIS OF THE DISTRICT AS A WHOLE Government Wide The District s net position was $1.280 billion at June 30, 2015. The largest portion of the District s net position, $1.816 billion, reflect its investment in capital assets (i.e. land, buildings, furniture, buses and equipment), less any related debt used to acquire those assets that is still outstanding. The District uses these capital assets to provide services to students; consequently, these assets are not available for future spending. Although the District s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. An additional portion of the District s net position ($207.2 million) represents resources that are subject to external restrictions on how they may be used. Table 1 Summary of Net Position Governmental Activities (in thousands) * Restated Increase Percentage June 30, 2015 June 30, 2014 (Decrease) Change Current and other assets $ 594,033 $ 663,761 $ (69,728) (10.5% ) Capital assets (net) 3,453,561 3,517,803 (64,242) (1.8% ) Total assets 4,047,594 4,181,564 (133,970) (3.2% ) Accumulated Decrease in Fair Value of Hedging Derivatives 74,213 67,487 6,726 10.0% Deferred Loss on Debt Refunding 102,998 57,986 45,012 77.6% Pension Related* 117,012 66,857 50,155 75.0% Total Deferred Outflows of Resources 294,223 192,330 101,893 53.0% Current and other liabilities 276,294 295,443 (19,149) (6.5% ) Long-term liabilities* 2,517,444 2,815,386 (297,942) (10.6% ) Total liabilities 2,793,738 3,110,829 (317,091) (10.2% ) Pension Related 267,633-267,633 Total Deferred Inflows of Resources 267,633-267,633 0.0% Net position: Net investment in Capital Assets 1,816,219 1,781,012 35,207 2.0% Restricted 207,160 257,756 (50,596) (19.6% ) Unrestricted (deficit)* (742,933) (775,703) 32,770 4.2% Total net position $ 1,280,446 $ 1,263,065 $ 17,381 1.4% * Restated for GASB 68-increased Deferred Outflows of Resources and Long-term Liabilities ($715.4M) and decreased Net Position ($648.5M) Capital assets (net) decreased $64.2 million or 1.8% compared to prior year and primarily reflects the impact of current year depreciation exceeding capital spending. See Note 7 of the Notes to the Financial Statements for more information on capital assets. The analyses in Table 1, above, and Table 2, on page 8, focus on the summary of net position and summary of changes in net position for the District s governmental activities. 7

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA MANAGEMENT S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 Table 2 Summary of Changes in Net Position Governmental Activities (in thousands) * Restated Increase Percentage June 30, 2015 June 30, 2014 (Decrease) Change Revenues: Program revenue: Charges for services $ 47,906 $ 47,989 $ (83) (0.2%) Operating grants and contributions 480,756 476,357 4,399 0.9% Capital grants and contributions 15,585 14,357 1,228 8.6% General revenue: Property taxes 1,095,063 1,012,800 82,263 8.1% Grants and contributions not restricted 197,265 221,228 (23,963) (10.8%) Investment earnings 2,299 2,348 (49) (2.1%) Other general revenue 43,741 56,186 (12,445) (22.1%) Total revenues 1,882,615 1,831,265 51,350 2.8% Functions/Programs Expenses Instruction 1,030,417 1,039,889 (9,472) (0.9%) Instructional support services 168,660 173,540 (4,880) (2.8%) Board 6,606 6,103 503 8.2% General administration 9,033 9,162 (129) (1.4%) School administration 94,125 96,186 (2,061) (2.1%) Facilities acquisition and construction 20,846 26,147 (5,301) (20.3%) Fiscal services 5,677 5,837 (160) (2.7%) Food services 77,063 73,493 3,570 4.9% Central services 14,928 15,597 (669) (4.3%) Student transportation services 45,795 46,684 (889) (1.9%) Operation and maintenance of plant 191,642 190,457 1,185 0.6% Administrative technology services 7,022 6,068 954 15.7% Community services 36,538 35,887 651 1.8% Interest on long-term debt 47,229 80,122 (32,893) (41.1%) Unallocated depreciation/amortization 109,653 109,456 197 0.2% Total expenses 1,865,234 1,914,628 (49,394) (2.6%) Change in net position 17,381 (83,363) 100,744 (120.8%) Net Position - beginning 1,263,065 1,994,931 (731,866) (36.7%) Cumulative effect to implementing GASB No. 68 and No. 71 - (648,503) 648,503 (100.0%) Net Position - ending $ 1,280,446 $ 1,263,065 $ 17,381 1.4% * Restated expenses for Internal Service Fund Trnfr reported in revenue in FY14 (-$13M) and adj to Net Position for GASB #68 (-$648.5M). The results of this year s operations for the District as a whole are reported in the Statement of Activities. Table 2, above, takes the information from that statement and rearranges them slightly so the reader can see the total revenues and expenses for the current year compared to fiscal year 2014. As reported in the Statement of Activities, the cost of all of the governmental activities this year was $1.865 billion. Some costs were paid by those who benefited from the programs ($47.9 million), or by other governments and organizations who subsidized certain programs with grants and contributions ($496.3 million). The District paid for the remaining public benefit portion of the governmental activities with 8

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA MANAGEMENT S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 $1.095 billion in property taxes, $197.3 million in grants and contributions not restricted to specific programs, $2.3 million in investment earnings, and $43.7 million in other general revenue. Property taxes increased $82.3 million or 8.1%, which is primarily attributed to an 8% increase in property values. Grants and contributions not restricted decreased $24.0 million or 10.8%, which is primarily related to a decrease of $24.3 million in FEFP revenue. FEFP revenue decreased mainly due to increase in required local effort provided by property taxes. Other general revenue decreased by $12.4 million or 22.1%, which is primarily related to $8.2 million lower Impact Fee revenue in the current year and one time capital E-Rate revenue received in prior year. The pie chart below represents total expenditures classified by function. Instruction 55.2% Total Government Wide Expenses by Function Unallocated deprec/amort 5.9% Instructional support 9.0% Interest on long-term debt 2.5% Community services 2.0% Admin technology 0.4% Operation & maint of plant 10.3% Pupil transportation 2.5% Central services 0.8% Food services 4.1% Fiscal services 0.3% Board 0.4% General administration 0.5% School administration 5.0% Facilities acq & const 1.1% FINANCIAL ANALYSIS OF THE DISTRICT S FUNDS Governmental Funds As of June 30, 2015 the District s governmental funds reported a combined fund balance of $326.5 million, which is a decrease of $61.2 million or 15.8% under the prior year. The General Fund, which is the chief operating fund of the District and is always considered a major fund, had a fund balance of $117.1 million which is an increase of $5.3 million or 4.8%. The increase is mainly due to the receipt of $4.5 million onetime funds related to the lease of the district spectrum. At the end of the current fiscal year, unassigned fund balance of the General Fund was $50.0 million. The COPS Debt Service Fund, another major fund, reported an ending fund balance of $91.2 million which is a decrease of $16.0 million or 14.9% when compared with prior year. The decrease is related to debt service payments the District will need to make in early fiscal year 2016. 9

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA MANAGEMENT S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 The Capital Improvement Fund, another major fund, reported an ending fund balance of $25.9 million a decrease of $10.6 million or 28.9% due to the timing of revenue and capital outlay spending. Other Non-Major Governmental Funds, which represent a summarization of all the other governmental funds, ended the year with total fund balance of $92.3 million, a decrease of $40.0 million or 30.2%. This decrease is primarily due to capital spending and transfers out exceeding revenue received in the current year. Proprietary Funds The District s internal service funds reported a combined net position of $50.3 million. The Health Internal Service Fund ended the year with a net position of $84.5 million, which is an increase of $11.5 million or 15.7% over last year due to premiums exceeding claims and other expenses. The District created the Worker s Compensation, General and Auto Liabilities Claim Fund on July 1, 2013. Since proprietary funds use accrual basis accounting, this Fund has a negative net position of $34.2 million due to recording the actuarially determined long term claims liabilities in fiscal year 2014. The District has a plan to fund this negative position over a 15 year period. General Fund Budgetary Highlights During the year, appropriations decreased $3.5 million from original budget to final budget. The decrease in appropriations is primarily attributed to capital maintenance projects that were not completed by the end of the year. The General Fund actual expenditures were less than the budgeted appropriations by approximately $65.8 million. This was due to enhanced cost containment measures put in place, such as a hiring freeze on non-instructional positions and increased scrutiny of overtime and purchases, as well as unspent funds in programs such as aftercare, workforce development and state categorical programs. CAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets As shown in Table 3, on the next page, at June 30, 2015, the District had $3.454 billion invested in a broad range of capital assets, including land, construction in progress, improvements other than buildings, buildings and fixed equipment, furniture, fixtures and equipment, motor vehicles, audio visual materials and computer software. This amount represents a net decrease (including additions, deletions and depreciation) of $64.2 million from last year. The decrease is primarily due to depreciation expense of $108.5 million exceeding capital spending of $49.2 million. Capital spending in the current year reflects the acquisition of 124 buses, completion of modernization project for North Palm Beach Elementary as well as ongoing modernization of Gladeview Elementary and Rosenwald Elementary. The District s successful building program is winding down, as the proceeds of the referendum sales tax that ended in December 2010 and capital millage proceeds decline. Between fiscal year 2001 and fiscal year 2015, forty-one (41) new schools were built and fifty-six (56) others were replaced or totally renovated. Modernization of North Palm Beach Elementary was completed in August 2014, and Gladeview Elementary and Rosenwald Elementary modernization projects are expected to be completed before August 2015. The District continues its effort to provide state-of-the-art facilities for all of its students. Future school renovations and replacements will be scheduled based upon the availability of funding. See Note 7 of the Notes to the Financial Statements for more information on capital assets. 10

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA MANAGEMENT S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 Table 3 Capital Assets at Year End Governmental Activities (in thousands) Increase June 30, 2015 June 30, 2014 (Decrease) Land 338,593 $ 341,459 $ (2,866) Construction in progress 36,433 33,737 2,696 Improvements other than buildings 57,898 56,800 1,098 Buildings and fixed equipment 4,135,273 4,111,969 23,304 Furniture, fixtures and equipment 126,019 136,045 (10,026) Motor vehicles 108,143 98,713 9,430 AV materials and computer software 47,791 56,752 (8,961) Less: accumulated depreciation (1,396,564) (1,317,672) (78,892) Total capital assets, net $ 3,453,586 $ 3,517,803 $ (64,217) Long-term Debt As shown in Table 4, at the end of this year, the District had $1.810 billion in debt outstanding which is $68.5 million lower than last year. The decrease in outstanding debt is due to debt repayments of $74.8 million, the impact net impact of refunding transactions and regular amortization ($0.4 million), offset in part by an increase in derivative instruments of $6.7 million. See Notes 10 and 11 of the Notes to the Financial Statements for more information on long-term liabilities and derivatives. Table 4 Long-term Debt Outstanding at Year End Governmental Activities (in thousands) Increase June 30, 2015 June 30, 2014 (Decrease) Notes / Loans Payable $ 9,785 $ 14,002 $ (4,217) Capital outlay bond issues 17,430 21,885 (4,455) Certificates of participation 1,600,393 1,711,223 (110,830) Borrowing-Swap Upfront Payment 2,876 3,092 (216) Derivative Instruments - Hedging 74,213 67,487 6,726 Plus: issuance premiums 105,256 60,798 44,458 Total $ 1,809,953 $ 1,878,487 $ (68,534) The District s certificates of participation are rated Aa3 by Moody s Investors Service, and AA- by Standard and Poor s Corporation, and AA- by Fitch Ratings Services. The District is subject to State laws that limit the amount of State Board of Education Capital Outlay Bond Issues outstanding to 10% of the non-exempt assessed valuation. At June 30, 2015, the statutory limit for the District was approximately $16.3 billion, providing additional debt capacity of approximately $16.3 billion. State Statute requires that no more that 75% of the capital millage levy be used for COP debt service. The District s debt policy limits the issuance of COPS by stating that the debt service could not exceed half of the capital millage levy. In fiscal year 2009, when the capital millage levy was reduced to 1.75 mils, the Debt Policy was amended to allow debt service to be up to 1 mil but should be within 50% of the capital 11

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA MANAGEMENT S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 millage levy within five years. Based on the reduction of the capital millage levy and existing property values, the District s capacity to issue new COPS debt has been dramatically reduced. Other long-term obligations include liability for compensated absences, estimated claims liability, postemployment benefits, and the new reporting requirement of GASB #68 related to net pension liabilities. FACTORS BEARING ON THE DISTRICT S FUTURE The School District s revenues are determined in large part by the Florida Legislature and Governor. Funding per student is set as part of the State s annual budget approval. Local school board taxing authority is also governed at the state level with the Legislature dictating the largest component of school property taxes, known as the Required Local Effort (RLE), and through statutory caps that limit the remaining components of the school levy. The fiscal year 2016 state budget provided Florida school districts with a 3% increase in funding per student for operating costs. Although revenues are increasing for fiscal year 2016, budget reductions were needed to offset the loss of $20 million in non-recurring revenues utilized in fiscal year 2015 and provide funding for School Board budget priorities. School and department allocations were adjusted to achieve $16.8 million in savings for fiscal year 2016. The proposed budget is responsive to the Board s budget priorities and includes a $27.2 million reserve for employee salary negotiations. While labor contracts must be bargained to determine salary increases, this reserve is sufficient to fund a 3% salary increase for the entire workforce. The District s.25 mill property tax levy for operations was approved by the voters for another four years in 2014, from fiscal year 2016 through fiscal year 2019. For fiscal year 2016, the.25 mills generate $39.6 million in revenue. The revenue is designated for art, music, and physical education instruction, choice programs, and career academies. The capital budget remains a concern as Florida school districts continue to be seriously impacted by the Legislature s 25% reduction to local capital improvement taxing authority. Our District has lost over $865 million in capital revenue since the Legislature first approved a reduction to local taxing authority in 2009. In order to balance the proposed fiscal year 2016 budget, $82.7 million in forecasted needs were left unfunded. Looking forward, the District is in need of additional revenue to properly maintain school facilities and equipment. With the Legislature once again failing to restore capital millage rates to 2.0 mills, the District is faced with finding other avenues to solve the shortage of funds needed to maintain adequate levels of maintenance, provide technology for classrooms and replace an aging bus fleet. The District plans to engage an outside company to assist with taking a deep dive into the allocation of resources. This review will look for opportunities to move resources closer to our schools or free up dollars for other budget priorities, including employee salary considerations. The fiscal year 2017 budget will be developed in a manner that aligns resources to the District s anticipated revised strategic plan. The external Budget Advisory Committee will be involved with this process and continue to evaluate budget recommendations before they are brought to the Board for approval. 12

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA MANAGEMENT S DISCUSSION AND ANALYSIS FOR THE FISCAL YEAR ENDED JUNE 30, 2015 CONTACTING THE DISTRICT S FINANCIAL MANAGEMENT This financial report is designed to provide our citizens, taxpayers, parents, students, investors and creditors with a general overview of the District s finances and to demonstrate the District s accountability for the money it receives. If you have any questions about this report or need additional financial information, contact: Michael J. Burke, Chief Operating Officer The School District of Palm Beach County, Florida 3328 Forest Hill Boulevard, Suite C-316 West Palm Beach, FL 33406 Visit our website at: http://www.palmbeachschools.org/ View an electronic copy of our CAFR at: http://www.palmbeachschools.org/accounting/ 13

BASIC FINANCIAL STATEMENTS

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA STATEMENT OF NET POSITION JUNE 30, 2015 (amounts expressed in thousands) Primary Government Governmental Activities ASSETS Cash, cash equivalents and investments $ 526,457 Derivative instrument investments 67 Taxes receivable 20,327 Accounts, deposits and interest receivable 1,209 Due from other governments or agencies 25,147 Inventories 12,216 Restricted assets (cash with fiscal agent) 3,546 Other assets 5,039 Capital assets: Land 338,593 Construction in progress 36,433 Improvements other than buildings 57,898 Buildings and improvements 4,135,273 Furniture, fixtures and equipment 126,019 Motor vehicles 108,143 Audio/video materials and software 47,791 Less accumulated depreciation (1,396,564) Total capital assets, net of depreciation 3,453,586 TOTAL ASSETS 4,047,594 DEFERRED OUTFLOWS OF RESOURCES Accumulated Decreases in Fair Value of Hedging Derivatives 74,213 Deferred Loss on Debt Refunding 102,998 Pension 117,012 TOTAL DEFERRED OUTFLOWS OF RESOURCE 294,223 LIABILITIES Accounts and contracts payable 26,388 Accrued payroll and payroll deductions 115,782 Retainage payable on contracts 1,492 Deposits payable 144 Interest payable 34,126 Unearned revenue 921 Noncurrent liabilities: Portion due or payable within one year: Loans/note payable 2,720 Bonds payable 3,717 Liability for compensated absences 15,703 Certificates of participation payable 53,495 Borrowing-swap upfront payment 218 Estimated claims 22,538 Portion due or payable after one year: Loans/note payable 7,065 Bonds payable 15,386 Liability for compensated absences 166,659 Certificates of participation payable 1,650,482 Borrowing-swap upfront payment 2,658 Derivative instrument - Hedging 74,213 Estimated claims 34,291 Other post-employment benefits obligation 102,032 Net Pension Liability 463,708 TOTAL LIABILITIES 2,793,738 DEFERRED INFLOWS OF RESOURCES Pension 267,633 TOTAL DEFERRED INFLOWS OF RESOURCES 267,633 NET POSITION Net Investment in capital assets 1,816,220 Restricted for: Categorical carryover programs 1,957 Debt service 60,645 Capital projects 87,299 School food service 27,479 Other purposes (See Footnote 14) 29,779 Unrestricted (deficit) (742,933) TOTAL NET POSITION $ 1,280,446 The notes to the financial statements are an integral part of this statement. 15

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THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 2015 (amounts expressed in thousands) GENERAL FUND COPS DEBT SERVICE ASSETS Cash, cash equivalents and investments $ 213,471 $ 91,358 Taxes receivable 16,312 - Accounts and interest receivable 1,202 7 Due from other governments or agencies 7,394 - Due from other funds 3,000 - Inventories 9,016 - Other assets - - TOTAL ASSETS 250,395 91,365 LIABILITIES AND FUND BALANCES LIABILITIES Accounts and contracts payable 15,825 183 Accrued payroll and payroll deductions 115,158 - Due to other funds - - Retainage payable on contracts - - Deposits payable 144 - Unearned revenue 461 - TOTAL LIABILITIES 131,588 183 DEFERRED INFLOWS OF RESOURCES Unavailable Revenue 1,675 - TOTAL DEFERRED INFLOWS OF RESOURCES 1,675 - FUND BALANCES Nonspendable 9,016 - Restricted 28,105 91,182 Committed - - Assigned 30,011 - Unassigned 50,000 - TOTAL FUND BALANCES 117,132 91,182 TOTAL LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES $ 250,395 $ 91,365 The notes to the financial statements are an integral part of this statement. 18

OTHER NON-MAJOR TOTAL CAPITAL GOVERNMENTAL GOVERNMENTAL IMPROVEMENT FUNDS FUNDS $ 24,362 $ 93,397 $ 422,588 4,015-20,327 - - 1,209-15,396 22,790 - - 3,000-3,200 12,216-42 42 28,377 112,035 482,172 2,279 5,887 24,174-8,593 123,751-3,000 3,000 156 1,336 1,492 - - 144-928 1,389 2,435 19,744 153,950 - - 1,675 - - 1,675-3,200 12,216 25,942 51,000 196,229-85 85-38,006 68,017 - - 50,000 25,942 92,291 326,547 $ 28,377 $ 112,035 $ 482,172 19

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET POSITION JUNE 30, 2015 (amounts expressed in thousands) Total Fund Balances - Governmental Funds $ 326,547 Amounts reported for governmental activities in the statement of net position are different because: Capital assets used in governmental activities are not financial resources and therefore are not reported in the governmental funds. Cost of the assets 4,850,150 Accumulated depreciation (1,396,564) Total capital assets, net of depreciation 3,453,586 Bond insurance amounts related to debt issuance are reported as expenditures in the governmental funds when first incurred, however, they are included with other assets in the governmental activities in the statement of net position. 990 Deferred outflow of resources are reported at the fair values of corresponding hedging derivative instruments in the statement of net position. 74,213 Deferred outflow of resources are reported at net carrying amount for refunding transactions in the statement of net position. 102,998 Deferred outflows of resources related to Pensions are recorded in the statement of net position. 117,012 Derivative instruments - investment assets reported on the statement of net position. 67 Expenditures for insurance extending over more than one accounting period not allocated between or among accounting periods, but accounted for as expenditures of the period of acquisition in the funds. 4,007 An internal service fund is used by management to charge the costs of health premiums, worker's compensation, auto and general liability to individual funds. The assets and liabilities of the internal service fund are included in governmental activities in the statement of net position. Assets 109,772 Liabilities 59,439 Net position 50,333 Revenues that are unavailable or unearned in the governmental funds but are recognized as revenue in the governmental-wide financial statements. 2,143 Deferred inflows of resources related to Pensions are recorded in the statement of net position. (267,633) Long-term liabilities are not due and payable in the current period and not reported as liabilities in the governmental funds. Long-term liabilities (net of premiums) at year-end consist of: Loans / Note payable 9,785 Bonds payable 19,103 Certificates of participation payable 1,703,977 Borrowing-swap upfront payment 2,876 Hedging derivative instruments 74,213 Compensated absences 174,103 Other post employment benefits 101,926 Net Pension Liability 463,708 Accrued interest on long-term debt 34,126 (2,583,817) Total Net Position - Governmental Activities $ 1,280,446 The notes to the financial statements are an integral part of this statement. 21

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THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL GENERAL FUND FOR THE YEAR ENDED JUNE 30, 2015 (amounts expressed in thousands) Variances - Actual Positive (Negative) Budgeted Amounts (Budgetary Original Final Original Final Basis) to Final to Actual REVENUES: Local sources $ 941,428 $ 949,843 $ 949,839 $ 8,415 $ 4 State sources 477,884 486,002 486,006 8,118 (4) Federal sources 8,207 8,635 8,635 428 - TOTAL REVENUES 1,427,519 1,444,480 1,444,480 16,961 - EXPENDITURES: Instruction 1,057,315 1,045,691 1,002,658 11,624 43,033 Instructional support services 115,671 119,157 115,777 (3,486) 3,380 Board 7,161 7,341 6,845 (180) 496 General administration 6,508 6,541 6,432 (33) 109 School administration 95,279 97,327 96,768 (2,048) 559 Facilities acquisition and construction 634 880 541 (246) 339 Fiscal services 5,976 6,130 5,825 (154) 305 Food Services 22 93 87 (71) 6 Central services 14,706 16,040 14,780 (1,334) 1,260 Student transportation services 46,521 47,635 46,866 (1,114) 769 Operation of plant 126,533 127,500 126,164 (967) 1,336 Maintenance of plant 77,956 75,103 70,498 2,853 4,605 Administrative Technology Services 8,131 7,994 7,006 137 988 Community services 43,515 45,014 36,476 (1,499) 8,538 Debt service 122 122 35-87 TOTAL EXPENDITURES 1,606,050 1,602,568 1,536,758 3,482 65,810 DEFICIENCY OF REVENUES UNDER EXPENDITURES (178,531) (158,088) (92,278) 20,443 65,810 OTHER FINANCING SOURCES (USES): Transfers in 106,325 91,341 91,341 (14,984) - Transfers out (7) (75) (75) (68) - Sale of capital assets 4,900 4,896 4,896 (4) - Proceeds from loss recoveries 2,000 117 117 (1,883) - TOTAL OTHER FINANCING SOURCES 113,218 96,279 96,279 (16,939) - NET CHANGE IN FUND BALANCE $ (65,313) $ (61,809) 4,001 $ 3,504 $ 65,810 FUND BALANCE, JULY 1, 2014 (GAAP BASIS) 111,813 FUND BALANCE, JUNE 30, 2015 (BUDGETARY BASIS) 115,814 Adjustment To Conform With GAAP: Elimination of encumbrances 1,318 FUND BALANCE, JUNE 30, 2015 (GAAP BASIS) $ 117,132 The notes to the financial statements are an integral part of this statement.

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA STATEMENT OF NET POSITION PROPRIETARY FUND JUNE 30, 2015 (amounts expressed in thousands) ASSETS Current Assets: Governmental Activities Internal Service Fund Cash, cash equivalents and investments $ 103,869 Due from other agencies 2,357 Total Current Assets 106,226 Noncurrent Assets: Restricted cash 3,546 Total Noncurrent Assets 3,546 Total assets $ 109,772 LIABILITIES Current liabilities: Accounts payable $ 2,214 Accrued payroll and payroll deductions 68 Portion due or payable within one year: Estimated unpaid claims 22,538 Total Current Liabilities 24,820 Noncurrent liabilities: Portion due or payable after one year: Liability for compensated absences 222 Estimated unpaid claims 34,291 Other post-employment benefits obligation 106 Total Noncurrent Liabilities 34,619 Total liabilities 59,439 NET POSITION Unrestricted $ 50,333 The notes to the financial statements are an integral part of this statement.

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET POSITION PROPRIETARY FUND FOR THE YEAR ENDED JUNE 30, 2015 (amounts expressed in thousands) Governmental Activities Internal Service Fund OPERATING REVENUES: Premium revenue $ 198,709 Other operating revenue 10,163 TOTAL OPERATING REVENUES 208,872 OPERATING EXPENSES: Salaries 1,133 Benefits 338 Purchased services 333 Claims and other expenses 197,342 TOTAL OPERATING EXPENSES 199,146 OPERATING INCOME 9,726 NONOPERATING REVENUES: Interest and other income 175 TOTAL NONOPERATING REVENUES 175 CHANGE IN NET POSITION 9,901 NET POSITION - Beginning of year 40,432 NET POSITION - End of year $ 50,333 The notes to the financial statements are an integral part of this statement. 30

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA STATEMENT OF CASH FLOWS PROPRIETARY FUND FOR THE YEAR ENDED JUNE 30, 2015 (amounts expressed in thousands) Governmental Activities Internal Service Fund CASH FLOWS FROM OPERATING ACTIVITIES: Cash receipts from customers and interfund services provided $ 198,709 Cash payments for claims and administration (191,982) Cash payments for salaries and benefits (1,468) Other receipts 8,969 Net cash provided by operating activities 14,228 CASH FLOWS FROM INVESTING ACTIVITIES: Interest and other income 175 Net cash provided by investing activities 175 Net increase in cash and cash equivalents 14,403 Cash and cash equivalents, beginning of year* 93,012 Cash and cash equivalents, end of year* $ 107,415 RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED BY OPERATING ACTIVITIES: Operating Loss $ 9,726 Adjustments to reconcile operating income to net cash provided by operating activities: Changes in assets and liabilities: Increase in due from other agencies (1,194) Increase in accounts payable 700 Increase in payroll and payroll deductions 3 Increase in estimated unpaid claims 4,993 Total adjustments 4,502 Net cash provided by operating activities $ 14,228 *Includes Restricted Cash The notes to the financial statements are an integral part of this statement. 31

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA STATEMENT OF FIDUCIARY NET POSITION FIDUCIARY FUNDS JUNE 30, 2015 (amounts expressed in thousands) PRIVATE- PURPOSE TRUST FUND FLORIDA FUTURE EDUCATORS OF AMERICA AGENCY FUND SCHOOL INTERNAL FUNDS ASSETS Cash, cash equivalents and investments $ 359 $ 17,700 Accounts receivable - 1,178 TOTAL ASSETS $ 359 $ 18,878 LIABILITIES Accounts payable $ - $ 489 Due to student organizations - 18,389 TOTAL LIABILITIES - $ 18,878 NET POSITION Held in trust for scholarships 359 TOTAL NET POSITION $ 359 The notes to the financial statements are an integral part of this statement.

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FIDUCIARY FUNDS FOR THE YEAR ENDED JUNE 30, 2015 (amounts expressed in thousands) PRIVATE- PURPOSE TRUST FUND FLORIDA FUTURE EDUCATORS OF AMERICA ADDITIONS Donations $ 33 Interest 1 TOTAL ADDITIONS 34 DEDUCTIONS Scholarships 62 TOTAL DEDUCTIONS 62 CHANGE IN NET POSITION (28) NET POSITION - Beginning of year 387 NET POSITION - End of year $ 359 The notes to the financial statements are an integral part of this statement. 33

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2015 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The financial statements of the School District of Palm Beach County, Florida (the "District") have been prepared to conform with Accounting Principles Generally Accepted in the United States of America ( GAAP ) as applied to governmental units. The Governmental Accounting Standards Board ( GASB ) is the accepted standard setting body for establishing governmental accounting and financial reporting principles. Pursuant to Florida Statutes, Section 1010.01, the Superintendent of Schools is responsible for keeping records and accounts of all financial transactions in the manner prescribed by the State Board of Education. The following is a summary of the more significant of these policies. A. Reporting Entity The District and its governing board are organized and operated under Section 4, Article IX, of the Constitution of Florida and Chapter 1001 of Florida Statutes. The District's boundaries are coterminous with those of Palm Beach County. Management of the School District is independent of county and city governments. The membership of the governing board of the District (the "Board") consists of seven members elected from single member districts for overlapping four-year terms. The Superintendent is appointed by the Board to act as executive officer of the District. For financial reporting purposes, the accompanying financial statements include all of the operations over which the District is financially accountable. The District is financially accountable for organizations that make up its legal entity, as well as legally separate organizations that meet certain criteria. In accordance with GASB 14, "The Financial Reporting Entity," as amended by GASB 39, Determining Whether Certain Organizations Are Component Units and GASB 61, The Financial Reporting Entity: Omnibus an amendment of GASB Statements No. 14 and No. 34, the criteria for inclusion in the reporting entity involve those cases where the District or its officials appoint a voting majority of an organization s governing body, and are either able to impose its will on the organization and there is a potential for the organization to provide specific financial benefits to or to impose specific financial burdens on the District or the nature and significance of the relationship between the District and the organization is such that exclusion would cause the District s financial statements to be incomplete. Applying this definition, District management has determined that the component unit and/or joint venture reportable within the accompanying financial statements is the Palm Beach School Board Leasing Corporation (the "Corporation"). Blended Component Unit - The Corporation's sole purpose is to provide for financing and construction of certain District school facilities. Additionally, the Corporation is legally separate from the District and the Board of the Corporation consists of the seven Board members of the District. Therefore, the financial activities of the Corporation have been blended (reported as if it were part of the District) with those of the District. The Corporation does not publish individual component unit financial statements. Since the District is independent of and is not financially accountable for other governmental units or civic entities, these financial statements represent the operations of the District, the Corporation, as well as all of the funds of the District as a governmental unit. B. Measurement Focus, Basis of Accounting and Financial Statement Presentation Government-wide Financial Statements The Statement of Net Position and the Statement of Activities display information about the District as a whole. These statements include the financial activities of the primary government, except for Fiduciary Funds. The District eliminates from the Statement of Net Position and the Statement of Activities most interfund receivables and payables and transfers between funds as well as the transaction associated with its Internal Service Funds. The government-wide statements are prepared using the economic resources measurement focus and accrual basis accounting. This is the same approach used in the preparation of the Proprietary Fund financial statements but differs from the manner in which governmental fund financial statements are prepared. 34

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2015 Governmental fund financial statements therefore include reconciliation with brief explanations to better identify the relationship between the government-wide statements and the statements for governmental funds. The government-wide statement of activities presents a comparison between direct expenses and program revenues for each function or program of the District s governmental activities. Direct expenses are those that are specifically associated with a service, program or department and are therefore clearly identifiable to a particular function. Program revenues include charges paid by the recipient of the goods or services offered by the program and grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues which are not classified as program revenues are presented as general revenues of the District. The comparison of direct expenses with program revenues identifies the extent to which each governmental function is self-financing or draws from the general revenues of the District. Fund Financial Statements Fund financial statements report detailed information about the District. The focus of governmental fund financial statements is on major funds rather than reporting funds by type. Each major fund is reported in a separate column. Non-major funds are aggregated and presented in a single column. Internal Service Funds are aggregated and presented in a single column on the face of the Proprietary Fund statements. Fiduciary Funds are reported by fund type. The Governmental Funds are accounted for on the flow of current financial resources measurement focus. Governmental fund financial statements are prepared using the current financial resource measurement focus and the modified accrual basis of accounting. Under the modified accrual basis of accounting, expenditures are generally recognized when the related fund liability is incurred. The Proprietary Fund is accounted for on an economic resources measurement focus. Accordingly, the Statement of Revenues, Expenses and Changes in Fund Net Position for the Proprietary Fund reports increases and decreases in total economic net worth. The private purpose trust fund is reported using the economic resources measurement focus. GOVERNMENTAL FUNDS Governmental Funds are those through which most District functions are financed. The acquisition, use and balances of the District s expendable financial resources and the related liabilities (except those accounted for in the Proprietary Fund and Fiduciary Funds) are accounted for through Governmental Funds. The measurement focus is upon determination of changes in financial resources rather than upon determination of net income. The following are the District s major Governmental Funds: General Fund The General Fund is the primary operating fund of the District. Ad valorem tax revenues, revenues from the Florida Education Finance Program ("FEFP") and other receipts not allocated by law or contractual agreement to other funds are accounted for in this fund. Similarly, general operating expenditures, fixed charges, and capital improvement costs that are not paid through other funds are paid from this fund. COPS Debt Service Fund The COPS Debt Service Fund accounts for the repayment of the certificates of participation. Capital Improvement Fund The Capital Improvement Fund accounts for locally received funds, primarily ad valorem tax revenue, for the acquisition, construction or renovation of capital facilities, including land and equipment. 35

PROPRIETARY FUNDS THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2015 The Proprietary Fund is used to account for ongoing organizations and activities, which are operated and financed in a manner similar to those found in the private sector. The measurement focus is upon the determination of net income. The only Proprietary Fund that the District has are Internal Service Funds. A Proprietary Fund distinguishes operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a Proprietary Fund s principal ongoing operations. Operating expenses for Internal Service Funds include salaries, benefits, administrative expenses, and claims paid. All items not meeting this definition are reported as nonoperating revenues and expenses. Internal Service Fund Internal Service Fund is used to account for the financing of goods and services provided by one department to another on a cost reimbursement basis. The District has two Internal Service Funds, one for group health and one for worker's compensation, general and auto liability claims. As of July 1, 2013, the latter fund was created in order to separately report claims instead of consolidating the activity within the General Fund. The negative net position of this new fund will be funded over a 15 year period. FIDUCIARY FUNDS Fiduciary Funds are used to account for assets held by the District on behalf of outside related organizations or on behalf of other funds within the District. The Fiduciary Funds are prepared under the economic resources measurement focus and the accrual basis of accounting. Agency Funds Agency Funds consist of activity funds, which are established at each school to record the receipts and disbursements of various school activities administered for the general welfare of the students and completion of certain planned objectives and special programs of school groups. The District retains no equity interest in these funds. Agency Funds are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations. Private Purpose Trust Fund A trust fund was established in January 1993 and is used to account for a District-supported Florida Future Educators of America. Revenues consist of employee donations and interest income. Expenditures represent scholarships for future teachers, which are awarded in accordance with the trust requirements. BASIS OF ACCOUNTING Basis of accounting determines when transactions are recognized in the financial records and reported in the financial statements. Government-wide financial statements are prepared using the accrual basis of accounting. Governmental funds use the modified accrual basis of accounting. Proprietary and Fiduciary Funds use the accrual basis of accounting. Modified Accrual Under the modified accrual basis, revenues are recognized in the accounting period in which they become susceptible to accrual, i.e., both measurable and available. "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Significant revenues susceptible to accrual include ad valorem taxes, reimbursable-type grants and interest on investments. The District considers all revenues (with the exception of the expenditure-driven grants) as available if they are collected within sixty (60) days after yearend. The expenditure driven grants are considered available if received within one year from the balance sheet date. Current year property tax revenue is recognized when taxes are received, except at year end when revenue is recognized for taxes received by the District within sixty (60) days subsequent to fiscal year end. Expenditures are recognized in the accounting period in which the liability is incurred. However, exceptions include the amount of unmatured principal and interest on general long-term debt, compensated absences, OPEB, pension, claims and judgments and certain prepaid items which are recognized when due/paid. 36

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2015 In applying the susceptible to accrual concept to revenues from Federal and State sources, the legal contractual requirements of the numerous individual programs are used as guidance. Revenue from grants and entitlements is recognized when all eligibility requirements have been satisfied. There are, however, essentially two types of these revenues. In one, monies must be expended for the specific purpose or project before the District will receive any amounts; therefore, revenues are recognized based upon the occurrence of expenditures. In the other type, monies are virtually unrestricted as to purpose of expenditure and are usually revocable only for failure to comply with prescribed legal and contractual requirements. These resources are reflected as revenues at the time of receipt or earlier if the susceptible to accrual criteria are met. In all cases, monies received before the revenue recognition criteria have been met are reported as deferred revenue. Accrual Under the accrual basis of accounting, revenues are recognized in the period earned and expenses are recognized in the period incurred. Revenue Recognition State Revenue Sources Revenues from State sources for current operations are primarily from the Florida Education Finance Program ( FEFP ), administered by the Florida Department of Education ( FDOE ), under the provisions of Chapter 1011, Florida Statutes. This revenue is recognized when received. The District files reports on full time equivalent ( FTE ) student membership with the FDOE. The FDOE accumulates information from these reports and calculates the allocation of FEFP funds to the District. After review and verification of FTE reports and supporting documentation, the FDOE may adjust subsequent fiscal period allocations of FEFP funding for prior year errors disclosed by its review. Normally, such adjustments are treated as reductions of revenue in the year the reduction is made, as amounts are not significant. The District receives and recognizes revenue from the State to administer certain categorical educational programs. State Board of Education rules require that revenue earmarked for these programs be expended only for the program for which the money is provided and require that the money not expended as of the close of the fiscal year be carried forward into the following year to be expended for the same categorical educational programs. Property Taxes On an accrual basis, property tax revenue anticipated to be collected is recognized in the fiscal year for which it is levied. Delinquent taxes collected in subsequent periods are recognized as revenue during the fiscal year in which they are received. Use of Resources When both restricted and unrestricted resources are available for use, it is the District s policy to use restricted resources first, and then unrestricted resources as they are needed. C. Budgetary Policies Expenditures are controlled by budgetary systems in accordance with various legal and administrative requirements that govern the District's operations. The budget represents a process through which policy decisions are made, implemented and controlled. The budget is adopted on a basis consistent with GAAP, except for encumbrances. The budgetary process includes encumbrances in the current year budget. The encumbrances are reported as expenditures on the budgetary basis of accounting. Annual budgets are legally adopted for all funds except the Fiduciary Funds. The budget amounts for revenues and expenditures reflect all amendments to the original budget dated September 11, 2013 the date of the final amendment approved by the Board. Significant dates in the budgeting timetable follow: 1. The Palm Beach County Property Appraiser certifies to the District the taxable value of all nonexempt District property by July 1 of each year, or the Clerk of the Circuit Court is required to certify an interim tax roll. 2. Within 24 days of tax roll certification, the Board considers and approves for advertising a tentative 37

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2015 budget. 3. Within 29 days after tax roll certification, the District advertises the tentative budget and the millage rates therein. 4. A public hearing to adopt the tentative budget and proposed millage rate is held not less than two nor more than five days after the budget is advertised. 5. Within 35 days of tax roll certification, the District notifies the Palm Beach County Property Appraiser of proposed millage rates. At a final public hearing within 80 days, but not less than 65 days, after tax roll certification, the Board adopts the District budget. The major functional level is the legal level of budgetary control. Per Board policy, management is authorized to make budget amendments at function level with Board approval. All interim budget amendments between major functional areas within each fund are submitted to the Board for approval. Federal and State grant budget amendments which require State approval prior to processing are also submitted to the Board for approval with monthly amendments. Unreserved appropriations are cancelled at the end of the fiscal year. However, encumbered appropriations for funds do not lapse at the end of the fiscal year. Restricted, committed and assigned fund balances at June 30, 2015 for funds under budgetary control have been re-appropriated for the fiscal year 2016 operating budget within the appropriate fund. Programs restricted for carryover include all State categorical grants required to be expended on specific programs and District approved carryover programs. D. Encumbrances Encumbrance accounting, under which purchase orders, contracts, and other commitments for the expenditure of funds are recorded to reserve a portion of an applicable appropriation, is utilized for budgetary control purposes. Encumbrances are not the equivalent of expenditures, and accordingly, amounts assigned for encumbrances at the governmental fund level indicate that portion of the fund balance segregated for expenditure upon vendor performance. E. Cash, Cash Equivalents and Investments The District maintains a Treasurer s pool for the District s cash and investments. Each fund s portion of the pool is presented on the financial statements. Investments are stated at fair value, based on quoted market prices or recognized pricing sources. Investments consist of direct obligations of the United States Treasury, U.S. Government Agency Securities, U.S. Government sponsored agencies, money market funds investing in U.S. Treasury Securities, AAA rated local government investment pools, corporate notes, U.S. Government Supported Corporate Debt, and other investments allowable by the District s investment policy. All money market mutual funds are AAA rated by the various rating agencies and each fund is registered as a 2a-7 fund with the SEC. Rule 2a-7 of the Investment Company Act of 1940, comprises the rules governing money market funds. For purposes of the statement of cash flows, cash equivalents are considered to be the money market funds and all highly liquid investments with a maturity of three months or less when purchased. F. Inventories Inventories are valued at cost, using the average cost method. The District s inventories include various items consisting of school supplies, paper, textbooks, fuel, commodities, etc. USDA commodities received from the Federal government are recorded at the value established by the Federal government using the average cost method. Inventorial items are recorded as expenditures when shipped to schools and department offices (the consumption method). The nonspendable fund balance at the governmental fund level is equal to the amount of inventories at year-end to indicate the portion of the governmental fund balances that are nonspendable. 38

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2015 G. Prepaid Items Expenditures for insurance and similar services extending over more than one accounting period are not allocated between or among accounting periods in the governmental funds and are instead accounted for as expenditures in the period of acquisition (Purchase method). On the Government Wide financial statements these amounts are reported as prepaid. H. Capital Assets Capital assets represent the cumulative amount of capital assets owned by the District. Purchased assets are recorded as expenditures in the fund financial statements and are capitalized at cost on the governmentwide statement of net position. Gifts or contributions are recorded at fair value at the time received. The District s capitalization levels are $1,000 on tangible personal property, $100,000 on building improvements, $50,000 on improvements other than buildings and $100,000 on intangible assets. Other costs incurred for repairs and maintenance is expensed as incurred. All reported capital assets except land and construction in progress are depreciated. Depreciation is computed using the straight-line method over the following estimated useful lives: Description Furniture, Fixtures and Equipment Motor Vehicles Audio/Video Materials & Software Buildings and Improvements Improvements Other Than Buildings Intangibles Estimated Lives 3 15 years 5 10 years 3 5 years 15 50 years 15 years 5 years I. Deferred outflows/inflows of resources In addition to assets, the statement of financial position has a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. One item is accumulated decrease in fair value of hedging derivatives (See Note 11). A second item is the net carrying amount of debt refunding reported in the government-wide statement of net position. A deferred loss on debt refunding results from the difference in the carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded debt or new refunding debt. A third item, in accordance with GASB 68, the District restated beginning balances and reports pension related deferred outflows of resources and deferred inflows of resources on its financial statements (see footnote 12 for additional information). On the Government Wide financial statements Deferred Outflows of Resources activity for fiscal year ended June 30, 2015 is as follows (in thousands): (Restated) Ending Balance June 30, 2014 Increase Decrease Deferred Outflows of Resources Accumulated Decrease in Fair Value of Hedging Derivatives $ 67,487 $ 6,726 - Ending Balance June 30, 2015 $ $ 74,213 Deferred Loss on Debt Refunding 57,986 56,482 11,470 102,998 Pension Related - FRS (see footnote 12) 55,326 89,297 55,326 89,297 Pension Related - HIS (see footnote 12) 11,321 27,715 11,321 27,715 Total Outflows of Resources $ 192,120 $ 180,220 $ 78,117 $ 294,223 39

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2015 In addition to liabilities, the statement of net position has a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The District has $1.7 million Unavailable Deferred Revenue (related to Medicaid administration claims) that qualifies as a deferred inflow of resources and it is shown in the governmental funds Balance Sheet under the modified accrual basis of accounting. On the Government Wide financial statements Deferred Inflows of Resources total $267.6 million as shown below (in thousands): Ending Balance June 30, 2014 Increase Decrease Ending Balance June 30, 2015 Deferred Inflows of Resources Pension Related - FRS (see footnote 12) $ - $ 267,633 $ - $ 267,633 Total Inflows of Resources $ - $ 267,633 $ - $ 267,633 J. Long Term Debt In the fund-level financial statements, governmental funds report the face amount of debt issued and debt principal payments, as well as any premiums (discounts) as other financing sources (uses). Debt issuance costs are reported as debt service expenditures. In the government-wide financial statements, long-term debt is reported as liabilities in the statement of net position. Bond premiums/discounts and Bond insurance cost are amortized over the life of the bonds. The District enters into interest rate swap agreements to modify interest rates on outstanding debt. The fair value of these instruments is reflected on the government wide financial statements (See Notes 10 and 11). K. Self-Insurance The District is self-insured for health (health insurance for employees and eligible dependents) and portions of its general and automobile liability insurance and workers compensation (insurance for various risks of loss related to torts; theft of; damage to; destruction of assets; errors and omissions; injury to employees and natural disasters). The estimated liability for self-insured risks represents an estimate of the amount to be paid on insurance claims reported and on insurance claims incurred but not reported (See Note 8). Consistent with GAAP guidelines, in the Proprietary Fund financial statements, the liability for self-insured risks is recorded under the accrual basis of accounting. As of July 1, 2013, Workers Compensation, General and Auto Claims are reported as an Internal Service Fund. The negative net position will be funded over a fifteen year period. L. Compensated Absences Compensated absences are payments to employees for accumulated vacation and sick leave. These amounts also include the related employer s share of applicable taxes and retirement contributions. District employees may accumulate unused vacation and sick leave up to a specified amount depending on their date of hire. Vacation and sick leave are payable to employees upon termination or retirement at the current rate of pay on the date of termination or retirement. The District uses the vesting method to calculate the compensated absences amounts. The entire compensated absence liability is reported on the government-wide financial statements. The portion related to employees in the Internal Service Fund is recorded at the fund level. The current portion is the amount estimated to be used in the following year. An expenditure is recognized in the governmental fund as 40

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2015 payments come due each period, for example, as a result of employee resignations and retirements. Compensated absences not recorded at the fund level represent a reconciling item between the fund level and government-wide presentations (See Note 10). M. Pensions In the government-wide statement of net position, liabilities are recognized for the District s proportionate share of each pension plan s net pension liability. For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Florida Retirement System (FRS) defined benefit plan and the Health Insurance Subsidy (HIS) defined benefit plan and additions to deductions from the FRS s and the HIS s fiduciary net position have been determined on the same basis as they are reported by the FRS and the HIS plans. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with benefit terms. Investments are reported at fair value. See footnote 12 for additional information regarding the District s retirement plans and related amounts. N. Accounting Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets/deferred outflows of resources and liabilities/deferred inflows of resources and disclosures of contingent assets/deferred outflows of resources and liabilities/deferred inflows of resources at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. O. Impact of Recently Issued Accounting Principles Recently Issued and Adopted Accounting Pronouncements In June 2012, the GASB issued Statement No. 68, Accounting and Financial Reporting for Pensions an amendment of GASB Statement No. 27 and GASB Statement No. 71, Pension Transition for Contributions made subsequent to the measurement date which were adopted by the District effective July 1, 2014. The District participates in the Florida Retirement System (FRS) defined benefit pension plan and the Health Insurance Subsidy (HIS) defined benefit plan administered by Florida Division of Retirement. As a participating employer, GASB Statement No. 68, requires employers participating in cost-sharing multiple-employer defined benefit pension plans to report the employers proportionate share of the net pension liabilities and related pension amounts of the defined benefit pension plans. The effect of the accounting change on net position as previously reported for fiscal year 2014 and prior years is a reduction of $648.5 million and is adjusted as of June 30, 2014 as follows (amounts in thousands): Governmental Activities Net Position, previously reported $ 1,911,568 Adjustment for FRS $ (377,138) Adjustment for HIS (271,365) Total pension related adjustment (648,503) Net Position, restated $ 1,263,065 Recently Issued Accounting Pronouncements In February 2015, GASB Statement No. 72, Fair Value Measurement and Application, will be effective for the District beginning with its year ending June 30, 2016. This Statement will address accounting and financial reporting issues related to fair value measurements, provide guidance for determining a fair value 41

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2015 measurement for financial reporting purposes, and provide guidance for applying fair value to certain investments and disclosures related to all fair value measurements. Management is currently evaluating the impact of the adoption of this statement on the District s financial statements. In June 2015, GASB Statement No. 73, Accounting and Financial Reporting for Pension and Related Assets That Are Not Within the Scope of GASB Statement No. 68, and Amendments to Certain Provisions of GASB Statement Nos. 67 and 68, will be effective for the District beginning with its year ending June 30, 2016, except those provisions that address employers and governmental nonemployer contributing entities for pensions that are not within the scope of GASB Statement No. 68, which are effective for the District beginning with its year ending June 30, 2017. This Statement will establish requirements for those pensions and pension plans that are not administered through a trust meeting specified criteria. Management is currently evaluating the impact of the adoption of this statement on the District s financial statements. In June 2015, GASB Statement No. 74, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans, will be effective for the District beginning with its year ending June 30, 2017. This Statement will establish rules on reporting by OPEB plans that administer benefits on behalf of governments. Management is currently evaluating the impact of the adoption of this statement on the District s financial statements. In June 2015, GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions, will be effective for the District beginning with its year ending June 30, 2018. This Statement outlines reporting by governments that provide OPEB to their employees and for governments that finance OPEB for employees of other governments. Management is currently evaluating the impact of the adoption of this statement on the District s financial statements. In June 2015, GASB Statement No. 76, The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments, will be effective for the District beginning with its year ending June 30, 2016. This Statement reduces the GAAP hierarchy to two categories of authoritative GAAP from the four categories under GASB Statement No. 55, The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments. The first category of authoritative GAAP consists of GASB Statements of Governmental Accounting Standards. The second category comprises GASB Technical Bulletins and Implementation Guides, as well as guidance from the AICPA that is cleared by the GASB. The Statement also addresses the use of authoritative and non-authoritative literature in the event that the accounting treatment for a transaction or other event is not specified within a source of authoritative GAAP. Management is currently evaluating the impact of the adoption of this statement on the District s financial statements. In August 2015, GASB Statement No. 77, Tax Abatement Disclosures, will be effective for the District beginning with its year ending June 30, 2017. This Statement requires state and local governments, for the first time, to disclose information about tax abatement agreements. It requires governments to disclose information about their own tax abatements separately from information about tax abatements that are entered into by other governments and reduce the reporting government s tax revenues. Management of the District is still in the process of determining what effect, if any, GASB 77 will have on the basic financial statements and related disclosures. 2. AD VALOREM TAXES The Board is authorized by Florida Statutes to levy property taxes for District operations, capital improvements and debt service. Property taxes consist of ad valorem taxes on real and personal property within the District. The Palm Beach County Property Appraiser assesses property values and the Palm Beach County Tax Collector collects the property taxes. Property values are assessed as of January 1 each year. The Board levies the property tax at the final budget hearing each year based on the assessed valuation of all non-exempt property. This levy finances the expenditures of the current fiscal year. Tax bills are mailed by the Palm Beach County Tax Collector on 42

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2015 November 1 and are due no later than April 1. After this date, taxes become an enforceable lien on property. Discounts of up to 4% are available for early payment. The majority of ad valorem taxes are collected in November and December and remitted to the School Board. Section 197.383, Florida Statutes, requires the Palm Beach County Tax Collector to distribute the taxes collected to each taxing authority at least four times during the first two months after the tax roll comes into the Tax Collector's possession, and at least once per month thereafter. Taxes are considered delinquent if not paid prior to April 1. State law provides for enforcement of collection of taxes by the sale of tax certificates on real property and for levy upon, seizure and sale of personal property after the Palm Beach County Tax Collector initiates a sequence of required procedures resulting in a court order to carry out the action. The State Legislature prescribes the maximum non-voted millage that may be levied by the Board for each fiscal year. The total millage rate levy was 7.586 mills and the total assessed value on which the 2014-15 levy was based was $150.1 billion. Gross taxes levied were approximately $1.1 billion. Total revenue, net of discounts, was approximately $1.1 billion. A portion of the taxes levied for the Local Capital Improvement Capital Project Fund, designated for repairs and maintenance programs are transferred to the General Fund as provided by Chapter 1013, Florida Statutes. For fiscal year 2015, the maintenance transfer amounted to approximately $78.7 million. Additionally, approximately $7.8 million was transferred for property insurance; approximately $4.8 million was transferred for charter school capital outlay bringing the total transfer from capital to approximately $91.3 million. 3. CASH, CASH EQUIVALENTS AND INVESTMENTS Cash and Cash Equivalents Florida Statutes authorize the deposit of District funds in demand deposits or time deposits of financial institutions approved by the State Treasurer and are defined as public deposits. All District public deposits are held in qualified public depositories pursuant to chapter 280, Florida Statutes, the "Florida Security for Public Deposits Act." Under the Act, all qualified public depositories are required to pledge eligible collateral having a market value equal to or greater than the average daily or monthly balance of all public deposits times the depository's collateral pledging level. The collateral pledging level may range from 50% to 125% depending upon the depository's financial condition and the length of time that the depository has been established. All collateral must be deposited with the State Treasurer. Any losses to public depositors resulting from insolvency are covered by applicable deposit insurance, sale of securities pledged as collateral and, if necessary, assessment against other qualified public depositories of the same type as the depository in default. All bank balances of the District are fully insured or collateralized. At June 30, 2015, the carrying amount of the District's cash deposits was approximately $253.4 million and the bank balance was approximately $260.3 million. The carrying amount of the Agency Fund - School Internal Funds cash deposits was approximately $17.7 million. The District receives interest on all collected balances in its cash accounts from the qualified public depository acting as its banking agent. Interest earnings are allocated to all funds based on the average daily balance of each fund s equity in the Treasurer s Pool. Cash Equivalents consist of amounts invested in Money Markets, Florida Education Investment Trust Fund (FEITF) and Florida Prime. Investments The District s investment policy permits investments in the Florida Prime Fund, FEITF, securities of the United States Government, U.S. Government Agencies, Federal instrumentalities, interest bearing time deposit or savings accounts, repurchase agreements, commercial paper, corporate notes, bankers acceptances, state and/or local government debt, and money market mutual funds. The District s investment advisor used the effective duration method to calculate effective duration measures for the securities held by the District. Besides measuring the sensitivity of the securities market value to changes in interest rates, the effective duration method accounts for any call (early redemption) features which a security may have. 43

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2015 As of June 30, 2015, the District had the following unrestricted cash and investments and maturities (amounts in thousands): PORTFOLIO / INVESTMENTS CARRYING VALUE EFFECTIVE DURATION Cash Deposits $ 253,382 N/A Money Market Funds 67,604 N/A Florida Education Investment Trust Fund (FEITF) 58,687 N/A Florida Prime 10 0.09 Commercial Paper 1,890 0.33 Core Fund Investments US Treasury - Notes 127,953 0.53 Federal Agency - Bond/Notes 8,864 1.77 Corporate Notes 5,712 2.07 Municipal Bonds 2,355 0.80 TOTAL $ 526,457 Interest Rate Risk To limit exposure to fair value losses resulting from increases in interest rates, the District s Investment Policy limits operating funds to maturities of two years or less. Investments of reserves, project funds, debt proceeds and other non-operating funds ("core funds") shall have a term appropriate to the need for funds and in accordance with debt covenants, but in no event shall exceed five (5) years and the average duration of the funds as a whole may not exceed three (3) years. The District s investment in the Federally Backed Securities (Fannie Mae, Freddie Mac (also known as Federal Home Loan Mortgage Corporation) and Farmer Mac) matures between September, 2016 and September, 2017. As of June 30, 2015, the District held no callable securities. Concentration of Credit Risk The District s Investment Policy specifies the maximum percentage allocation to any single investment type as well as the maximum percentage holding per issuer. Up to 100% of the portfolio may be invested in U.S. Government securities, 80% may be invested in Federal Instrumentalities (US government sponsored agencies) with no more than 50% with a single issuer and 50% may be invested in US government agencies with no more than 25% with a single issuer. Corporate Notes are limited to 15% of the portfolio with no more than 5% with a single issuer. 44

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2015 PORTFOLIO / INVESTMENTS CARRYING VALUE (in thousands) PERCENTAGE OF INVESTMENT BALANCE RATING S&P / MOODY'S Cash Deposits $ 253,382 48.13% Money Market Funds Dreyfus Treasury and Agency 41,393 7.86% AAAm/Aaa-mf Federated Government Obligation 16,543 3.14% AAAm/Aaa-mf Fidelity Institutional Government Fund 9,462 1.80% AAAm/Aaa-mf Goldman Sachs Government Fund 100 0.02% AAAm/Aaa-mf Morgan Stanley US Government 106 0.02% AAAm/Aaa-mf Florida Education Investment Trust Fund (FEITF) 58,687 11.15% AAAm Florida Prime 10 0.00% AAAm Commercial Paper Fortis 1,890 0.36% A-1 Investments in Fixed Income Securities US Treasury - Notes/Bill 127,953 24.30% AA+/Aaa Toyota Motor Corporation 1,209 0.23% AA-/Aa3 Berkshire Hathaway 1,126 0.21% AA/Aa2 Coca-Cola 451 0.09% AA/Aa3 Apple 1,190 0.23% AA+/Aa1 Chevron 1,736 0.33% AA/Aa1 Federally Backed Securities (Fannie Mae, Farmer Mac & Freddie Mac) - Long Term 8,864 1.68% AA+/Aaa Municipal Bonds 2,355 0.45% AA/Aa3 TOTAL $ 526,457 100.00% As of June 30, 2015, all District investments were in compliance with the District s Investment Policy or Debt Management Policy and did not exceed portfolio allocation or issuer maximums. Credit Risk The District s Investment Policy lists the authorized investment types as well as the minimum allowable credit rating for each investment type. Corporate notes purchased for investment must be issued by corporations organized and operating within the United States or by depository institutions licensed by the United States that have a long term debt rating, at the time of purchase, at a minimum "Aa" by Moody's and a minimum long term debt rating of "AA" by Standard & Poor's ( S&P ). The maximum length to maturity for corporate notes shall be three (3) years from the date of purchase. As of June 30, 2015, the District held $5.7 million of corporate notes of which had an S&P rating between AA- and AA+. All investments in the Federally Backed Securities (Fannie Mae, Freddie Mac (also known as Federal Home Loan Mortgage Corporation) and Farmer Mac) had a rating between AA+ and Aaa for securities held for more than one year. All other rated investments were rated between AA and AAA by S&P. As of June 30, 2015, the Local Government Investment Pools were rated AAAm by S&P. Custodial Risk The District s investment policy requires that all securities, with the exception of certificates of deposit, be held with a third party custodian; and all securities purchased by, and all collateral obtained by the District should be properly designated as an asset of the District. The securities must be held in an account separate 45

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2015 and apart from the assets of the financial institution. A third party custodian is defined as any bank depository chartered by the Federal government, the state of Florida, or any other state or territory of the United States which has a branch or principal place of business in the state of Florida as defined in 658.12, F.S., or by a national association organized and existing under the laws of the United States which is authorized to accept and execute trusts and which is doing business in the state of Florida. Certificates of deposit will be placed in the provider's safekeeping department for the term of the deposit. Security transactions between a broker/dealer and the custodian involving the purchase or sale of securities by transfer of money or securities are made on a "delivery vs. payment" basis, if applicable, to ensure that the custodian will have the security or money, as appropriate, in hand at the conclusion of the transaction. As of June 30, 2015, the District s investment portfolio was held with a third-party custodian. 4. INVESTMENT DERIVATIVE INSTRUMENTS The District received an upfront premium payment of $3.0 million for allowing the swap counterparty the right to terminate the 2003B Interest Rate Swap if the 180 day average of the BMA Index exceeds 7.0% in the future. The barrier feature was effective June 2003 and is exercisable anytime until August 2018. Once the barrier option expires the District will be left with a fixed-payer swap that matures August 2029. Therefore, for accounting and financial reporting purposes, the barrier option derivative instrument is considered an investment derivative instrument. At June 30, 2015, the fair value of the barrier option is approximately $67,000 in asset position (See Note 11). 5. DUE FROM OTHER GOVERNMENTS OR AGENCIES At June 30, 2015, the District had a total of approximately $25.1 million in Due From Other Governments or Agencies which consisted of the following balances (amount in thousands): General Fund Non-major Governmental Funds Internal Service Fund Federal and State Sources Medicaid* $ 3,702 $ - $ - $ 3,702 MLVR (Motor Vehicle License Renewal) 2,035 - - 2,035 Grant and Entitlements - 14,962-14,962 FEMA 358 7-365 Fuel Tax* 138 - - 138 Local Sources Family Central 703 - - 703 Pharmacy Rebates - - 2,357 2,357 Other 458 427-885 Total Due From Other Governments or Agencies $ 7,394 $ 15,396 $ 2,357 $ 25,147 * All or partially recorded as Deferred Unavailable at the fund level. 6. INTERFUND ACTIVITIES Due to/from other funds consisted of the following balances at June 30, 2015 (amounts in thousands): Interfund Receivables Interfund Payables General Fund $ 3,000 $ - Other Non-Major Governmental Funds - 3,000 Total Interfund $ 3,000 $ 3,000 Total The amount payable by the Other Non-Major Governmental Fund to the General Fund is to cover temporary cash shortages related to timing of receipts. 46

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2015 Interfund transfers for the year ended June 30, 2015 were as follows (amounts in thousands): Transfer to: Other Non- Major Transfer from: General Fund COPS Debt Service Governmental Funds Total Capital Improvement $ 63,520 $ 141,360 $ 4,985 $ 209,865 General Fund - - 75 75 Other Non-Major Governmental Funds 27,821-97 27,918 Total $ 91,341 $ 141,360 $ 5,157 $ 237,858 Transfers to the General Fund relate primarily to funding for the maintenance, renovation and/or repair of school facilities, pursuant to Section 1011.71 of the Florida Statutes, and charter school capital outlay. Transfers to other non-major funds relate primarily to amounts transferred to make debt service payments. 7. CAPITAL ASSETS Capital asset activity for the fiscal year ended June 30, 2015 is as follows (amounts in thousands): Endi ng Balance June 30, 2014 Additions and Transfer In Retirements and Transfers Out Endi ng Balance June 30, 2015 Non-Depreciable Assets: Land $ 341,459 $ 1,096 $ 3,962 $ 338,593 Construction in Progress 33,737 27,320 24,624 36,433 Total Non-Depreciable Assets 375,196 28,416 28,586 375,026 Depreciable Assets: Improvements Other Than Buildings 56,800 1,165 67 57,898 Buildings and Improvements 4,111,969 24,204 900 4,135,273 Furniture, Fixtures & Equipment 136,045 6,014 16,040 126,019 Motor Vehicles 98,713 13,675 4,245 108,143 Audio/Video Materials & Software 56,752 329 9,290 47,791 Total Depreciable Assets 4,460,279 45,387 30,542 4,475,124 Less Depreciation For: Improvements Other Than Buildings (24,002) (3,833) (45) (27,790) Buildings and Improvements (1,057,649) (86,747) (813) (1,143,583) Furniture, Fixtures & Equipment (105,063) (9,177) (15,286) (98,954) Motor Vehicles (79,861) (6,457) (4,201) (82,117) Audio/Video Materials & Software (51,097) (2,266) (9,243) (44,120) Total Accumulated Depreciation (1,317,672) (108,480) (29,588) (1,396,564) Capital Assets, Net $ 3,517,803 $ (34,677) $ 29,540 $ 3,453,586 Depreciation expense for the year ended June 30, 2015 of approximately $108.5 million was not allocated to specific functions. The District s capital assets essentially serve all functions and as such the depreciation expense is included as a separate line item in the statement of activities. 47

8. RISK MANAGEMENT THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2015 The District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; administrative errors and omissions; injuries to employees, students and guests; as well as natural disasters. The District is self-insured for portions of its general and automobile liability insurance, workers compensation and health insurance. Losses involving auto and general liability claims are limited (generally) by provisions of the Florida State Statute 768.28. These self-insured funds are administered by a third party. The District purchases commercial insurance for other risks including property, construction and other miscellaneous risks. The employee health insurance claims liability is based on an analysis performed by management, which is based on historical trends. The remaining claims liability is based on an actuarial evaluation performed by an independent actuary as of June 30, 2015 using a discounted rate factor of 4.0%. The liability consists of claims reported and payable, as well as an estimate for claims incurred but not reported. At June 30, 2015, the liability for claims consisted of approximately $13.0 million, $13.2 million and $30.6 million for employee health, auto and general liability, and workers compensation, respectively. A summary of changes in the estimated liability for self-insured risks is as follows (amounts in thousands): Fiscal Year Ended June 30, 2014 Fiscal Year Ended June 30, 2015 Beginning Balance $ 47,705 $ 51,836 Additions: Current year and changes in estimates 178,550 185,046 Reductions: Claim payments (174,419) (180,053) Ending Balance $ 51,836 $ 56,829 9. SHORT-TERM DEBT Tax Anticipation Notes On September 25, 2014 the District issued Tax Anticipation Notes ("TANS"), Series 2014 for $115.0 million. Note proceeds were used to pay fiscal year 2015 District operating expenditures prior to the receipt of ad valorem taxes. The notes were repaid in January 2015. Short-term debt activity for the year ended June 30, 2015 was as follows (amounts in thousands): Beginning Balance July 1, 2014 Issued Redeemed Ending Balance June 30, 2015 Tax anticipation notes $ - $ 115,000 $ (115,000) $ - Total short-term debt $ - $ 115,000 $ (115,000) $ - 48

10. LONG-TERM LIABILITIES THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2015 A summary of changes in long-term liabilities for the year ended June 30, 2015, is as follows (amounts in thousands): (Restated) Beginning Balance June 30, 2014 Additions Reductions Ending Balance June 30, 2015 Amounts Due Within One Year Governmental Activities: Bonds, Notes and Leases Payable: Notes/Loans Payable $ 14,002 $ - $ (4,217) $ 9,785 $ 2,720 Capital Outlay Bond Issue 21,885 4,275 (8,730) 17,430 3,717 Certificates of Participation 1,711,223 506,770 (617,600) 1,600,393 53,495 Borrowing-Swap Upfront Payment 3,092 - (216) 2,876 218 Derivative Instruments-Hedging 67,487 6,726-74,213-1,817,689 517,771 (630,763) 1,704,697 60,150 Plus (Less) Issuance Premium (Discount) 60,798 67,974 (23,515) 105,257 - Total Bonds, Notes and Leases Payable 1,878,487 585,745 (654,278) 1,809,954 60,150 Other Liabilities: Compensated Absences 186,582 12,117 (16,337) 182,362 15,703 Self-Insurance Claims and Judgments 51,836 185,046 (180,053) 56,829 22,538 Post Employment Benefits 95,639 12,006 (5,613) 102,032 - Net Pension Liability 715,360 26,325 (277,977) 463,708 - Total Other Liabilities 1,049,417 235,494 (479,980) 804,931 38,241 Total Governmental Activities Long-Term Liabilities $ 2,927,904 $ 821,239 $ (1,134,258) $ 2,614,885 $ 98,391 The compensated absences and post-employment benefits are generally liquidated by the general fund. Long term claims and judgments are liquidated by the internal service funds. Pension contributions are paid by the governmental fund consistent with employee compensation. Beginning balances restated in accordance with GASB Statement No. 68 and No. 71 see footnote 12. Bus and Equipment Loan On February 20, 2014, the District entered into a loan agreement with TD Equipment Finance for financing the acquisition of 124 buses and other equipment for $14.0 million. Under the terms of the loan agreement, the District s annual payment includes interest at 1.235% and is payable over five years. The annual future minimum loan payments are as follows (amounts in thousands): Total Principal Principal Interest and Interest FY16 $ 2,720 $ 113 $ 2,833 FY17 2,802 78 2,880 FY18 2,836 44 2,880 FY19 1,427 9 1,436 $ 9,785 $ 244 $ 10,029 49

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2015 State Board of Education Capital Outlay Bond Issues State Board of Education Capital Outlay Bond Issues ("COBI") are serviced entirely by the State using a portion of the District's share of revenue derived from motor vehicle license taxes pursuant to Chapter 320, Florida Statutes, and Article XII, Section 9(d), of the Florida Constitution. The State Board of Administration determines the annual sinking fund requirements. The amounts necessary to retire bonds and interest payable are withheld from the entitlement to the District. Interest rates on the COBI bonds range from 2.00 % to 5.00 %. Interest is payable semiannually on January 1 and July 1. The bonds are redeemable at par. A summary of bond terms are presented as follows (amounts in thousands): Capital Outlay Bond Issues Date of Issue Amount Issued Remaining Interest Rates (Percent) Final Maturity Date Debt Outstanding June 30, 2014 Debt Issued Debt Matured FY 14-15 Debt Refunded FY 14-15 Debt Outstanding June 30, 2015 COBI 2005-A (1) 5/1/2005 $ 21,200-1/1/2017 $ 6,000 $ - $ 2,640 $ 3,360 $ - COBI 2005-B (1) 7/1/2005 2,675-1/1/2020 1,430-280 1,150 - COBI 2009-A 9/10/2009 1,655 5.0% 1/1/2019 915-160 - 755 COBI 2010-A 10/14/2010 9,700 3.5% to 5.0% 1/1/2030 8,000-425 - 7,575 COBI 2010-A 10/14/2010 1,790 4.0% to 5.0% 1/1/2022 1,550-140 - 1,410 COBI 2011-A 12/7/2011 5,820 3.0% to 5.0% 1/1/2023 3,990-575 - 3,415 COBI 2014-B (1) 12/2/2014 4,275 2.0% to 5.0% 1/1/2020-4,275 - - 4,275 (1) COBI 2014-B refunded COBI 2005-A and COBI 2005-B $ 47,115 $ 21,885 $ 4,275 $ 4,220 $ 4,510 $ 17,430 The debt service requirements through maturity to the holders of the Capital Outlay Bond Issue are as follows (amounts in thousands): Year Ended June 30 Principal Capital Outlay Bonds Interest Total Principal and Interest 2016 $ 3,717 $ 813 $ 4,530 2017 2,317 610 2,927 2018 1,543 494 2,037 2019 1,311 417 1,728 2020 1,177 358 1,535 2021-2025 4,590 1,007 5,597 2026-2030 2,775 331 3,106 Total $ 17,430 $ 4,030 $ 21,460 The District is subject to State Board of Education Administrative Rule 6A-1037(2) that limits the amount of State Board of Education Capital Outlay Bond Issues outstanding to 10% of the non-exempt assessed 50

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2015 valuation. At June 30, 2015, the statutory limit for the District was approximately $16.3 billion, providing additional debt capacity of approximately $16.3 billion. Capital Outlay Bond Issue Refunding On December 2, 2015, the Florida Department of Education issued State Board of Education Capital Outlay Bonds, Series 2014-A (COBI 2014-A). The bonds were issued to advance refund the State Board of Education Capital Outlay Bonds, Series 2005-A (COBI 2005-A) and Series 2005B-B (COBI 2005-B). The COBI 2014-A coupon rate ranges from 2.0% to 5.0%. The COBI 2014-A bonds are due on January 1, 2020. Certificates of Participation On November 16, 1994, the District entered into a Master Lease Purchase Agreement (the "Master Lease") dated November 1, 1994, with the Palm Beach School Board Leasing Corporation, a Florida not-for-profit corporation, to finance the acquisition and construction of certain facilities, and equipment for District operations. The Corporation was formed by the Board solely for the purpose of acting as the lessor for Certificates of Participation financed facilities, with the District as lessee. The Corporation issued Certificates of Participation (COP) to third parties, evidencing undivided proportionate interest in basic lease payments to be made by the District, as lessee, pursuant to the Master Lease. Simultaneously therewith, the Board entered into Ground Leases with the Corporation for the Facilities sites. The District also sold Certificates of Participation Qualified Zone Academy Bonds ( QZAB ). The QZAB program is a financial instrument that provides a different form of subsidy from traditional tax-exempt bonds. Interest on QZABs is paid by the Federal government in the form of an annual tax credit to an eligible financial institution that holds the QZAB. The QZAB issuer is responsible for repayment upon maturity. The tax credits and bonding authority are made available by the Federal government to support innovative school partnerships; enhance reform initiatives, including augmenting Federal education programs, technology and vocational equipment; and development of curriculum or better teacher training to promote market driven technology. To be eligible, a school must: 1. Be located in an Empowerment Zone or an Enterprise Community or have 35% or more of its students eligible for free or reduced lunch under the National School Lunch Act. 2. Obtain cash and/or in-kind contribution agreements from partnerships equal to at least 10% of the gross proceeds of the QZAB. The District deposits funds annually into an escrow account, which when coupled with interest earnings will be sufficient to pay off the principal at maturity. As part of the American Reinvestment and Recovery Act, the District was authorized to issue up to $67.7 million of Qualified School Construction Bonds (QSCB) for the purpose of new construction. The District chose to modernize two schools (Galaxy Elementary and Gove Elementary) and replace two roofs (Belle Glade Elementary and Pioneer Park Elementary). The District issued the bonds as Taxable Certificates of Participation through the Build America Bond program, also created by the ARRA legislation. The District issued taxable bonds and receives a federal subsidy from the Treasury department equal to the difference between the taxable and tax-exempt rates. The Certificates were sold to Bank of America during a competitive sale held on November 3, 2010 and closed on November 15, 2010. The par amount was $67.7 million and the interest rate was 5.40%. The District will pay interest only until 2019 when deposits to the sinking fund begin. The final maturity of the bonds is August 1, 2025. The total interest that will be paid over the life of the bonds is $53.8 million. A total subsidy of $48.5 million will be recorded as revenue in the year earned. Therefore, the amount the District will pay net of the federal subsidy is $5.3 million. In the current year, the District recorded $3.2 million subsidy as revenue and $3.6 million as interest expense resulting in a net impact of $0.4 million. 51

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2015 Subsequent to the sale of the QSCB certificates, the District entered into a forward delivery agreement (FDA) classified as a nonparticipating interest-earning investment contract with Barclays Bank related to the COPs 2010A QSCB. A forward delivery agreement is a type of investment in which the investor purchases eligible securities on a periodic basis from the agreement provider at a fixed rate of return. The Board expects to purchase eligible securities, which consist of direct obligations of or obligations guaranteed by the US Treasury and AAA-rated senior debt obligations of Fannie Mae, Freddie Mac the FHLB and Federal Farm Credit System from Barclays on a semi-annual basis beginning July 19, 2019 through the final maturity date of August 1, 2025. The Agreement will generate a guaranteed fixed rate of return of 4.262% or $8.1 million. The interest earnings associated with this transaction will completely offset the interest due (net of the federal subsidy) and will generate an additional $2.8 million to be used to repay the principal in 2025. The Corporation leases facilities and equipment to the District under the Master Lease. The Master Lease is automatically renewable annually unless terminated, in accordance with the provisions of the Master Lease, as a result of default or the failure of the Board to appropriate funds to make lease payments in its final official budget. Failure to appropriate funds to pay lease payments under any lease will, and an event of default under any lease may, result in the termination of all leases. The remedies on default or upon an event of non-appropriation include the surrender of the COP Series 1994A, Series, 1995A, Series 1996A, Series 2000A, Series 2001A, Series 2002A, Series 2002B, Series 2002C, Series 2002D, Series 2003A, Series 2003B, Series 2004A, Series 2006A, Series 2007A, Series 2007B, Series 2007E; QZAB Series 2002, QZAB Series 2004, QZAB Series 2005, and QSCB Series 2010A Facilities by the District and the Trustee's re-letting for the remaining Ground Lease term, or the voluntary sale of the COP Series 1994A, Series 1995A, Series 1996A, Series 2000A, Series 2001A, Series 2002A, Series 2002B, Series 2002C, Series 2002D, Series 2003A, Series 2003B, Series 2004A, Series 2006A, Series 2007A, Series 2007B, Series 2007E; QZAB Series 2002, QZAB Series 2004, QZAB Series 2005, and QSCB Series 2010A, Facilities by the School Board. In either case, the proceeds will be applied against the School Board's obligations under the Master Lease. 52

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2015 A summary of lease terms are presented as follows (amounts in thousands): Certificate Series Date of Issue Amount Issued Remaining Interest Rates (Percent) Final Maturity Date Debt Outstanding June 30, 2014 53 Debt Issued FY 14-15 Debt Matured FY 14-15 Debt Refunded/ Defeased June 30, 2015 Debt Outstanding June 30, 2015 Ground Lease Term 2002 QZAB 06/11/2002 $ 950-06/11/2016 $ 950 $ - $ - $ - $ 950 06/11/2016 2002E (1) 09/01/2002 93,350 4.00% to 5.38% 08/01/2016 26,425-11,665-14,760 06/30/2016 2003A (2) 06/26/2003 60,865 3.4% to 5.00% 08/01/2015 7,250-3,570-3,680 08/01/2021 2003B (3) 06/26/2003 124,295 0.72% ** 08/01/2029 124,295 - - - 124,295 08/01/2029 2004A (13) 05/04/2004 103,575 5.00% 08/01/2015 6,830-3,335-3,495 08/01/2029 2004 QZAB 04/30/2004 2,923-04/30/2020 2,923 - - - 2,923 04/29/2020 2005A (4) 03/22/2005 124,630-08/01/2015 123,080-220 122,860-08/01/2028 2005 QZAB 12/15/2005 2,150-12/15/2020 2,150 - - - 2,150 12/15/2020 2006A 05/25/2006 222,015 4.25% to 5.00% 08/01/2016 181,025-6,585 160,405 14,035 08/01/2031 2007A 02/28/2007 268,545 4.00% to 5.50% 08/01/2017 205,360-12,205 152,885 40,270 08/01/2031 2007C (5) 03/22/2007 192,310 4.00% to 5.00% 08/01/2027 184,585-5,325-179,260 07/31/2027 2007D (6) 05/03/2007 30,485 5.00% 08/01/2015 9,760-4,760-5,000 06/30/2015 2007E 10/31/2007 147,390 3.90% to 5.00% 08/01/2017 134,675-4,585 115,065 15,025 08/01/2032 2010A QSCB 11/15/2010 67,665 5.40% *** 08/01/2025 67,665 - - - 67,665 08/01/2032 2011B (7) 06/29/2011 166,270 1.90% 08/01/2015 1,680-835 - 845 08/01/2025 2011A (8) 07/13/2011 112,425 4.125% to 5.00% 08/01/2032 112,425 - - - 112,425 08/01/2032 2011C (9) 11/15/2011 15,355 1.74% 08/01/2018 14,865-8,325-6,540 08/01/2018 2011D (10) 11/15/2011 25,065 2.64% 08/01/2021 24,525-330 - 24,195 08/01/2021 2012A (11) 05/15/2012 20,085 5.00% 08/01/2028 20,085 - - - 20,085 08/01/2028 2012B (12) 06/29/2012 116,555 0.56% **** 08/01/2028 111,955-4,645-107,310 08/01/2028 2012C (13) 08/09/2012 67,145 4.00% to 5.00% 08/01/2029 67,145 - - - 67,145 08/01/2029 2014A (14) 01/31/2014 115,560 0.1841% * 08/01/2027 115,560 - - - 115,560 08/01/2027 2014B (15) 06/27/2014 166,010 3.00% to 5.00% 08/01/2025 166,010 - - - 166,010 08/01/2025 2014C (16) 07/29/2014 33,280 5.00% 08/01/2031-33,280 - - 33,280 08/01/2031 2015A (17) 05/05/2015 106,315 2.52% 08/01/2022-106,315 - - 106,315 08/01/2022 2015B (18) 01/14/2015 145,535 5.00% 08/01/2031-145,535 - - 145,535 08/01/2031 2015D (19) 04/30/2015 221,640 5.00% 08/01/2032-221,640 - - 221,640 08/01/2032 $ 2,752,388 $ 1,711,223 $ 506,770 $ 66,385 $ 551,215 $ 1,600,393 * 2014A - Variable rate paid to certificate holders SIFMA +46 BPS. Resets weekly, 0.1841% at 6/30/2015 ** 2003B - Variable rate paid to certificate holders SIFMA + 65 basis points. Resets weekly, 0.72% at 6/30/2015 *** 2010A QSCB - Average coupon rate before IRS subsidy is 5.4%. Net interest rate with IRS subsidy is.5837% **** 2012B - Variable rate paid to certificate holders SIFMA +49 BPS. Resets weekly, 0.56% at 6/30/2015

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2015 (1) Issued to advance refund and defease a portion of the Series 1995A and Series 1996A Certificates of Participation. (2) Refunded and partially defeased by Series 2011D Certificates of Participation. (3) On March 20, 2008, the District converted and remarketed the Series 2003B (with no change to principal). (4) Issued to advance refund and defease a portion the Series 2001A, Series 2002A, Series 2002C and Series 2002D Certificates of Participation. ** (5) Issued to advance refund and defease a portion of the Series 2001A and Series 2002C Certificates of Participation. ** (6) Issued to advance refund and defease a portion of Series 1997A Certificates of Participation (which previously refunded Series 1994A Certificates of Participation). ** (7) Issued to advance refund and defease a portion of Series 2001B Certificates of Participation (which previously refunded Series 2000A Certificates of Participation). ** (8) Issued to advance refund and defease Series 2007B Certificates of Participation. ** (9) Issued to advance refund and defease a portion of Series 2002A Certificates of Participation. ** (10) Issued to advance refund and defease a portion of Series 2003A Certificates of Participation. ** (11) Issued to advance refund and defease a portion of Series 2002D Certificates of Participation. ** (12) Issued to advance refund and defease remaining Series 2002D Certificates of Participation. ** (13) Issued to advance refund and defease a portion of Series 2004A Certificates of Participation. ** (14) Issued to advance refund and defease remaining Series 2002B Certificates of Participation. ** (15) Issued to advance refund and defease a portion of Series 2011B Certificates of Participation (which previously refunded Series 2000A Certificates of Participation). ** (16) Issued to advance refund and defease Series 2007A Certificates of Participation. ** (17) Issued to advance refund and defease a portion of Series 2005A Certificates of Participation (which previously refunded Series 2001A, 2002A, 2002C, and 2002D Certificates of Participation). ** (18) Issued to advance refund and defease a portion of Series 2006A Certificates of Participation. ** (19) Issued to advance refund and defease a portion of Series 2007A and 2007E Cert. of Participation. ** ** These refunding issues were done in order to achieve debt service savings. The Certificates are not separate legal obligations of the Board but represent undivided proportionate interests in lease payments to be made from appropriated funds budgeted annually by the School Board for such purpose from current or other funds authorized by law and regulations of the Department of Education, including the local optional millage levy. However, neither the Board, the District, the State of Florida, nor any political subdivision thereof are obligated to pay, except from Board appropriated funds, any sums due under the Master Lease from any source of taxation. The full faith and credit of the Board and the District are not pledged for payment of such sums due under the Master Lease, and such sums do not constitute an indebtedness of the Board or the District within the meaning of any constitutional or statutory provision or limitation. A trust fund was established with a Trustee to facilitate payments in accordance with the Master Lease and the Trust Agreement. Various accounts are maintained by the Trustee in accordance with the trust indenture. Interest earned on invested funds is applied toward the basic lease payments. Basic lease payments are deposited with the Trustee semi-annually on June 30 and December 30 or January 5 (for variable rate issue), and are payable to Certificate holders on August 1 and February 1. Due to the economic substance of the issuances of Certificates of Participation as a financing arrangement on behalf of the Board, the financial activities of the Corporation have been blended in with the financial statements of the District. For accounting purposes, due to the blending of the Corporation within the District's financial statements, basic lease payments are reflected as debt service expenditures when payable to Certificate holders. During the year ended June 30, 2015, approximately $24.9 million was expended for capital outlay in the Certificates of Participation Capital Projects Funds. All Certificates of Participation issued are subject to arbitrage rebate. At June 30, 2015, the arbitrage liability was zero. 54

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2015 The debt service requirements through maturity to the holders of the Certificates of Participation, which will be serviced by the annual lease payments, are as follows (amounts in thousands): Year ended June 30 Series 2002E Series 2003A Series 2003B Series 2004A Series 2006A Series 2007A Series 2007C Series 2007D 2016 $ 12,295 $ 3,680 $ - $ 3,495 $ 6,850 $ 12,825 $ 920 $ 5,000 $ 4,795 $ - 2017 2,465 - - - 7,185 13,455 1,075-5,015-2018 - - - - - 13,990 605-5,215-2019 - - - - - - 800 - - - 2020 - - 19,150 - - - 1,905 - - 5,630 2021-2025 - - 105,145 - - - 67,170 - - 32,880 2026-2030 - - - - - - 106,785 - - 6,010 2031-2033 - - - - - - - - - 67,905 Total $ 14,760 $ 3,680 $ 124,295 $ 3,495 $ 14,035 $ 40,270 $ 179,260 $ 5,000 $ 15,025 $ 112,425 Year ended June 30 Bank Loan Series 2011B Series 2011C Series 2011D Series 2012A Series 2012B 2016 $ 845 $ 370 $ 340 $ - $ 85 $ - $ 105 $ 940 $ - $ - 2017-4,585 4,205-105 3,500 105 11,345-22,165 2018-230 4,325-5,130 3,680-14,335-22,595 2019-1,355 4,435-5,380 3,825 3,045 14,945-18,820 2020 - - 4,555-70 4,015 10,420 15,615-18,345 2021-2025 - - 6,335 1,795 23,335 22,950 59,435 88,645-24,390 Series 2012C Series 2014A Series 2014B Series 2007E Series 2014C 2026-2030 - - - 18,290 73,205 29,175 42,450 20,185 16,175-2031-2033 - - - - - - - - 17,105 - Total $ 845 $ 6,540 $ 24,195 $ 20,085 $ 107,310 $ 67,145 $ 115,560 $ 166,010 $ 33,280 $ 106,315 Series 2011A Series 2015A Year ended June 30 Series 2015B Series 2015D Series 2002 QZAB Series 2004 QZAB Series 2005 QZAB Series 2010A QSCB Total Lease Payment Total Interest Total Lease Payment & Interest 2016 $ - $ - $ 950 $ - $ - $ - $ 53,495 $ 67,225 $ 120,720 2017 - - - - - - 75,205 70,030 145,235 2018 6,745 - - - - - 76,850 67,286 144,136 2019 7,080 18,915 - - - - 78,600 64,152 142,752 2020 7,435 5,275-2,923 - - 95,338 61,027 156,365 2021-2025 43,140 30,600 - - 2,150-507,970 251,743 759,713 2026-2030 55,060 107,190 - - - 67,665 542,190 118,290 660,480 2031-2033 26,075 59,660 - - - - 170,745 11,260 182,005 Total $ 145,535 $ 221,640 $ 950 $ 2,923 $ 2,150 $ 67,665 $ 1,600,393 $ 711,013 $ 2,311,406 55

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2015 State Statute requires that no more that 75% of the capital millage levy be used for COP debt service. The District s debt policy limits the issuance of COPS by stating that the debt service could not exceed half of the capital millage levy. In fiscal year 2009, when the capital millage levy was reduced to 1.75 mils, the Debt Policy was amended to allow debt service to be up to 1 mil but should be within 50% of the capital millage levy within five years. Based on the reduction of the capital millage levy and lagging property values, the District s capacity to issue new COPS debt has been dramatically reduced. Defeased Debt On July 29, 2014, the District issued certificates of participation (Series 2014C) in the amount of $33.3 million (plus a premium of $2.2 million) with interest rate of 5.00% to refund a portion certificates of participation Series 2007A with interest rate of 5.00%. The District made a principal payment of $33.3 million and a call premium of $0.8 million, the total is recorded in the fund level financial statements as a payment to escrow agent. In addition, $1.2 million was placed in an escrow capital interest account for August 1, 2014, February 1, 2015 and August 1, 2015. The District was offered an upfront payment plus costs of issuance to extend the call date of the Certificates from 2017 to 2024. The net savings from this transaction is $2.2 million or 6.2% (which was applied as a call extension premium payment). The refunding meets the requirements of an in-substance defeasance and the liability for the refunded certificates was removed from the District s financial statements in the current fiscal year. On January 14, 2015, the District issued certificates of participation (Series 2015B) in the amount of $145.5 million (plus a premium of $26.8 million) with net interest cost of 3.26% to refund certificates of participation Series 2006A with interest rate at 5.0%. The District made a principal payment of $160.4 million and a call premium payment of $14.8 million, both are recorded in the fund level financial statements as a payment to escrow agent. As a result of the refunding, the District will decrease its total debt service requirement by $22.2M which results in an economic savings (the difference between the present value of the debt service payments on the old and new debt) of $17.7 million, or 11.03% of the principal amount being refunded. The refunding meets the requirements of an in-substance defeasance and the liability for the refunded certificates was removed from the District s financial statements in the current fiscal year. On April 30, 2015, the District issued certificates of participation (Series 2015D) in the amount of $221.6 million (plus a premium of $38.7 million) with net interest cost of 3.53% to refund certificates of participation Series 2007A and 2007E with interest rate ranging from 4.25% to 5.00% and interest rate of 5.00% respectively. The District made a principal payment of $234.7 million, and a call premium of $24.8 million both are recorded in the fund level financial statements as a payment to escrow agent. As a result of the refunding, the District will decrease its total debt service requirement by $22.3M which results in an economic savings of $17.6 million, or 7.5% of the principal amount being refunded. The refunding meets the requirements of an in-substance defeasance and the liability for the refunded certificates was removed from the District s financial statements in the current fiscal year. On May 5, 2015, the District issued certificates of participation (Series 2015A) in the amount of $106.3 million (at par) with net interest cost of 2.52% to refund certificates of participation Series 2005A with interest rate at 5.0%. The District made a principal payment of $122.9 million and a call premium payment of $3.0 million, both are recorded in the fund level financial statements as a payment to escrow agent. As a result of the refunding, the District will decrease its total debt service requirement by $7.9M which results in an economic savings of $7.1 million, or 5.8% of the principal amount being refunded. The refunding meets the requirements of an in-substance defeasance and the liability for the refunded certificates was removed from the District s financial statements in the current fiscal year. On June 26, 2015, the District restructured Series 2012B in the amount of $107.3 million. The interest rate was variable with a rate that reset monthly @70% of 1-M Libor + 75 bps through August 1, 2015. The new interest rate is SIFMA + 49 bps which not only reduce the interest rate but also eliminates the basis risk by aligning the index to the same index used by the associated interest rate swap. 56

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2015 In prior years, the District defeased certain certificates of participation by creating separate irrevocable trust funds. New debt has been issued and the proceeds used to purchase U.S. Government Securities that were placed in an irrevocable trust with an escrow agent to provide for all future debt service payments. These investments and fixed earnings from the investments are sufficient to fully service the defeased debt until the debt is called or matures. For financial reporting purposes, the debt has been considered defeased and therefore removed as a liability from the financial statements. As of June 30, 2015, the total amount of defeased debt outstanding but removed from the District s financial statements amounted to $517.9 million. Certificates of Participation: Thousands Defeased by Series Maturities Outstanding Call Date COPS Series 2001A 8/2015-8/2022 $ 49,580 8/1/2015 2015A 2002A 8/2015-8/2022 27,290 8/1/2015 2015A 2002C 8/2015-8/2022 24,980 8/1/2015 2015A 2005A 8/2015-8/2022 21,010 8/1/2015 2015A 2006A 8/2015-8/2031 160,405 8/1/2026 2015B 2007A 8/2015-8/2031 119,605 8/1/2025 2015D 2007E 8/2015-8/2032 115,065 8/1/2025 2015D Total Defeased COPS $ 517,935 Hedging Derivative Instrument Payments and Hedged Debt As of June 30, 2015, aggregate debt service requirements of the District's debt (fixed-rate and variable-rate) and net receipts/payments on associated hedging derivative instruments are as follows. These amounts assume that current interest rates on variable-rate bonds and the current reference rates of hedging derivative instruments will remain the same for their term. As these rates vary, interest payments on variable-rate bonds and net receipts/payments on the hedging derivative instruments will vary. Refer to Note 11 for information on derivative instruments (amounts in thousands): Hedging Derivative Fiscal Year Ending June 30 Principal Interest Instruments, Net Total 2016 $ 190 $ 2,107 $ 14,458 $ 16,755 2017 210 2,106 14,453 16,769 2018 5,130 2,077 14,211 21,418 2019 8,425 2,039 13,898 24,362 2020 10,490 2,003 13,626 26,119 2021-2025 101,920 8,557 57,432 167,909 2026-2030 220,800 4,302 26,885 251,987 $ 347,165 $ 23,191 $ 154,963 $ 525,319 Borrowings of Hybrid Derivative Instruments The District sold a swaption with the 2002D certificates with a notional amount of $116,555,000. Upon entering into the swaption, the District received an up-front payments of $4,240,000 from the counterparty. The up-front payment was composed of the swaptions intrinsic value and time value. Accordingly, the 57

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2015 swaption is a hybrid instrument consisting of a borrowing and an embedded derivative instrument. The embedded derivative instrument the option was recorded at a value equal to the time value of the option only and the remaining value of the swaption was allocated to the companion instrument (borrowing). The intrinsic value of the borrowing was calculated using the net present value method and is recorded at historical cost. During the option period, interest accreted at the market rate at inception of the borrowing of 4.40% totaling $882,451. The 2002D swaption was executed August 1, 2012. The original borrowing of the 2012B/2002D continues to be amortized over the remaining term. Aggregate debt service requirements of the District's borrowing amounts assume that current interest rates on variablerate bonds is equal to the at the market rates at inception of the derivative instruments and will remain the same for their term. As these rates vary, interest payments on variable-rate bonds and net receipts/payments on the derivative instruments will vary. Refer to Note 11 for information on derivative instruments. Debt service requirements for the 2012B/2002D borrowing at June 30, 2015, are as follows (amounts in thousands): Total Fiscal Year Ending June 30 Principal Interest Principal and Interest 2016 $ 218 $ 118 $ 336 2017 228 108 336 2018 229 98 327 2019 223 89 312 2020 224 79 303 2021-2025 1,128 246 1,374 2026-2030 626 40 666 $ 2,876 $ 778 $ 3,654 11. DERIVATIVE INSTRUMENTS The fair value balances and notional amounts of derivative instruments outstanding at June 30, 2015, classified by type, and the changes in fair value of such derivative instruments are as follows (amounts in thousands): Changes in Fair Value Fair Value at June 30, 2015 Classification Amount Classification Amount Notional Governmental Activities Hedging Derivatives: 2002B/2014A Pay-fixed Interest Rate Swap Deferred outflow of resources $ 728 Liability $ (24,156) $ 115,350 2003B Pay-fixed Interest Rate Swap Deferred outflow of resources (4,967) Liability (25,518) 124,295 2002D/2012B Pay-fixed Interest Rate Swap Deferred outflow of resources (2,487) Liability (24,539) 107,310 Total Hedging Derivative Instruments $ (6,726) $ (74,213) Investment Derivatives: 2003B-Barrier Option at 7% Investment earnings (25) Asset 67 100,000 Total Investment Derivative Instruments $ (25) $ 67 58

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2015 The barrier option is considered an investment derivative instrument. Refer to Note 4. Investment Derivative Instruments for information on investment derivative instruments. All other derivative instruments are considered hedging derivative instruments. The fair values take into consideration the prevailing interest rate environment and the specific terms and conditions of each swap. All fair values were estimated using the zero-coupon discounting method. This method calculates the future payments required by the swap, assuming that the current forward rates implied by the yield curve are the market s best estimate of future spot interest rates. These payments are then discounted using the spot rates implied by the current yield curve for a hypothetical zero-coupon rate bond due on the date of each future net settlement payment on the swaps. Fair values of options may be based on an option pricing model, such as the Black-Scholes-Merton model. That model considers probabilities, volatilities, time, settlement prices, and other variables. Objective and Terms of Derivative Instruments The table below displays the objective and terms of the District's derivative instruments outstanding at June 30, 2015, along with the credit rating of the associated counterparty (amounts in thousands): Objective Notional Effective Date Maturity Date Amount of Cash Received Terms Counterparty Counterpart y Credit Rating Governmental Activities Hedging Derivatives: 2002B/2014A - Interest Rate Swap Hedge changes in cash flows on the 2014A Certificates $115,350 3/20/2002 8/1/2027 N/A Pay 4.22%; receive 67% of USD LIBOR or SIFMA bps Swap Index Citigroup Financials Products Inc. Baa2,A-,A 2003B -Interest Rate Swap Hedge changes in cash flows on the 2003B Certificates 124,295 6/26/2003 8/1/2029 N/A Pay 3.91%; receive SIFMA bps Swap Index UBS AG, Stamford Branch A2,A,A 2002D/2012B - Interest Rate Swap Hedge changes in cash flows on the 2012B Certificates 107,310 8/1/2012 8/1/2028 $ 4,240 Pay 4.71%; receive SIFMA Swap Index Citibank N.A. New York A2,A,A Investment Derivatives: 2003B -Barrier option at 7% Hedge against future increase in interest rates 100,000 6/26/2003 8/1/2018 3,010 See Note 1 UBS AG, Stamford Branch A2,A,A Note 1 Counterparty has right to terminate the 2003B Interest Rate Swap if the 180 day average of the BMA index exceeds 7.0% in the future Risks Credit Risk The District is exposed to credit risk on hedging derivative instruments that are in asset positions. To minimize its exposure to loss related to credit risk, it is the District s policy to require counterparty collateral posting 59

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2015 provisions on all swap agreements. These terms require full collateralization of the fair value of derivative instruments in asset positions (net of the effect of applicable netting arrangements) should the counterparty's credit rating fall below AA as issued by Standard & Poor's or Aa as issued by Moody's Investors Service. Collateral posted is to be in the form of U.S. Treasury securities held by a third-party custodian. The District has never failed to access collateral when required. It is the District's policy to enter into netting arrangements whenever it has entered into more than one derivative instrument transaction with a counterparty. Under the terms of these arrangements, should one party become insolvent or otherwise default on its obligations, close-out netting provisions permit the nondefaulting party to accelerate and terminate all outstanding transactions and net the transactions' fair values so that a single sum will be owed by, or owed to, the nondefaulting party. The District has investment derivative instruments in asset position of $67 thousand and no hedging derivative instruments in asset positions at June 30, 2015. Interest rate risk The District is exposed to interest rate risk on its interest rate swaps. On its pay-fixed, receive-variable interest rate swaps, as LIBOR or the SIFMA swap index decreases, the District's net payment on the swap increases which is offset by the variable rate paid on the hedged debt. Basis risk The District is exposed to basis risk on its pay-fixed 2002B/2014A interest rate swap hedging derivative instrument because the variable-rate payments received by the District is based on a rate or index other than interest rate the District pays on its hedged variable-rate debt, which is reset every 7 days. As of June 30, 2015, the weighted-average interest rate on the District's hedged variable-rate debt is 0.51%, while the fiscal year 2015 average of the SIFMA swap index rate is 0.05% and 67% of LIBOR is 0.11%. Termination risk The District or its counterparties may terminate a derivative instrument if the other party fails to perform under the terms of the contract including if either parties credit rating falls below designated levels. In addition, the District is exposed to termination risk on its 2003B interest rate swap with barrier option because the counterparty has the option to terminate the swap if the 180 day average of the BMA index exceeds 7.0% at any time beginning on the commencement date. If at the time of termination, a hedging derivative instrument is in a liability position, the District would be liable to the counterparty for a payment equal to the liability, subject to netting arrangements. 12. RETIREMENT PLANS Florida Retirement System (FRS) Defined Benefit Pension Plans General Information about the FRS The FRS was created in Chapter 121, Florida Statutes, to provide a defined benefit pension plan for participating public employees. The FRS was amended in 1998 to add the Deferred Retirement Option Program under the defined benefit plan and amended in 2000 to provide a defined contribution plan alternative to the defined benefit plan for FRS members effective July 1, 2002. This integrated defined contribution pension plan is the FRS Investment Plan. Chapter 112, Florida Statutes, established the Retiree Health Insurance Subsidy (HIS) Program, a cost-sharing multiple-employer defined benefit pension plan, to assist retired members of any state-administered retirement system in paying the costs of health insurance. Essentially all regular employees of the District are eligible to enroll as members of the State-administered FRS. Provisions relating to the FRS are established by Chapters 121 and 122, Florida Statutes; Chapter 112, Part IV, Florida Statutes; Chapter 238, Florida Statutes; and FRS Rules, Chapter 60S, Florida Administrative 60

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2015 Code; wherein eligibility, contributions, and benefits are defined and described in detail. Such provisions may be amended at any time by further action from the Florida Legislature. The FRS is a single retirement system administered by the Florida Department of Management Services, Division of Retirement, and consists of the two cost-sharing, multiple-employer defined benefit plans and other nonintegrated programs. A comprehensive annual financial report of the FRS, which includes its financial statements, required supplementary information, actuarial report, and other relevant information, is available from the Florida Department of Management Services Website (www.dms.myflorida.com). The District s pension expense in the governmental funds totaled $71.6 million for the fiscal year ended June 30, 2015. FRS Pension Plan Plan Description. The FRS Pension Plan (Plan) is a cost-sharing multiple-employer defined benefit pension plan, with a Deferred Retirement Option Program (DROP) for eligible employees. The general classes of membership are as follows: Regular Class Members of the FRS who do not qualify for membership in the other classes. Elected County Officers Class Members who hold specified elective offices in local government. Senior Management Service Class (SMSC) Members in senior management level positions. Special Risk Class Members who are employed as law enforcement officers and meet the criteria to qualify for this class Employees enrolled in the Plan prior to July 1, 2011, vest at six years of creditable service and employees enrolled in the Plan on or after July 1, 2011, vest at eight years of creditable service. All vested members, enrolled prior to July 1, 2011, are eligible for normal retirement benefits at age 62 or at any age after 30 years of service, except for members classified as special risk who are eligible for normal retirement benefits at age 55 or at any age after 25 years of service ). All members enrolled in the Plan on or after July 1, 2011, once vested, are eligible for normal retirement benefits at age 65 or any time after 33 years of creditable service except for members classified as special risk who are eligible for normal retirement benefits at age 60 or at any age after 30 years of service ). Members of the Plan may include up to 4 years of credit for military service toward creditable service. The Plan also includes an early retirement provision; however, there is a benefit reduction for each year a member retires before his or her normal retirement date. The Plan provides retirement, disability, death benefits, and annual cost-of-living adjustments to eligible participants. DROP, subject to provisions of Section 121.091, Florida Statutes, permits employees eligible for normal retirement under the Plan to defer receipt of monthly benefit payments while continuing employment with an FRS employer. An employee may participate in DROP for a period not to exceed 60 months after electing to participate, except that certain instructional personnel may participate for up to 96 months. During the period of DROP participation, deferred monthly benefits are held in the FRS Trust Fund and accrue interest. The net pension liability does not include amounts for DROP participants, as these members are considered retired and are not accruing additional pension benefits. Benefits Provided. Benefits under the Plan are computed on the basis of age and/or years of service, average final compensation, and service credit. Credit for each year of service is expressed as a percentage of the average final compensation. For members initially enrolled before July 1, 2011, the average final compensation is the average of the five highest fiscal years earnings; for members initially enrolled on or after July 1, 2011, the average final compensation is the average of the eight highest fiscal years earnings. The total percentage value of the benefit received is determined by calculating the total value of all service, which is based on the retirement class to which the member belonged when the service credit was earned. Members are eligible for in-line-of-duty or regular disability and survivors benefits. 61

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2015 The following chart shows the percentage value for each year of service credit earned: Class, Initial Enrollment, and Retirement Age/Years of Service % Value Regular Class members initially enrolled before July 1, 2011 Retirement up to age 62 or up to 30 years of service 1.60 Retirement at age 63 or with 31 years of service 1.63 Retirement at age 64 or with 32 years of service 1.65 Retirement at age 65 or with 33 or more years of service 1.68 Regular Class members initially enrolled on or after July 1, 2011 Retirement up to age 65 or up to 33 years of service 1.60 Retirement at age 66 or with 34 years of service 1.63 Retirement at age 67 or with 35 years of service 1.65 Retirement at age 68 or with 36 or more years of service 1.68 Elected County Officers 3.00 Senior Management Service Class 2.00 Special Risk Regular Service from December 1, 1970 through September 30, 1974 2.00 Service on and after October 1, 1974 3.00 As provided in Section 121.101, Florida Statutes, if the member is initially enrolled in the FRS before July 1, 2011, and all service credit was accrued before July 1, 2011, the annual cost-of-living adjustment is 3 percent per year. If the member is initially enrolled before July 1, 2011, and has service credit on or after July 1, 2011, there is an individually calculated cost-of-living adjustment. The annual cost-of-living adjustment is a proportion of 3 percent determined by dividing the sum of the pre-july 2011 service credit by the total service credit at retirement multiplied by 3 percent. Plan members initially enrolled on or after July 1, 2011, will not have a cost-of-living adjustment after retirement. Contributions. The Florida Legislature establishes contribution rates for participating employers and employees. Contribution rates during the 2014-15 fiscal year were as follows: Percent of Gross Salary Class Employee Employer (1) FRS, Regular 3.00 7.37 FRS, Elected County Officers 3.00 43.24 FRS, Senior Management Service 3.00 21.14 FRS, Special Risk Regular 3.00 19.82 DROP - Applicable to Members from All of the Above Classes 0.00 12.28 FRS, Reemployed Retiree (2) (2) TRS, Plan E 6.25 11.50 Notes: (1) (2) Employer rates include 1.26 percent for the postemployment health insurance subsidy. Also, employer rates, other than for DROP participants, include 0.04 percent for administrative costs of the Investment Plan. Contribution rates are dependent upon retirement class in which reemployed. 62

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2015 The District s contributions to the Plan totaled $79.7 million (which includes $20.1 million of employee contributions) for the fiscal year ended June 30, 2015. This excludes the HIS defined benefit pension plan contributions. Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions. At June 30, 2015, the District reported a liability of $154.7 million for its proportionate share of the Plan s net pension liability. The net pension liability was measured as of June 30, 2014, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of July 1, 2014. The District s proportionate share of the net pension liability was based on the District s 2014-15 fiscal year contributions relative to the 2013-14 fiscal year contributions of all participating members. At June 30, 2014, the District s proportionate share was 2.535 percent, which was an increase of 0.022 from its proportionate share measured as of June 30, 2013. For the fiscal year ended June 30, 2015, the District recognized pension credit of $44.1 million related to the Plan. In addition, the District reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources (in thousands): Description Deferred Outflows of Resources Deferred Inflows of Resources Differences between expected and actual experience $ - $ (9,573) Change of assumptions 26,791 Net difference between projected and actual earnings on FRS pension plan investments - (258,060) Changes in proportion and differences between District FRS contributions and proportionate share of contributions 3,182 - District FRS contributions subsequent to the measurement date 59,324 - Total $ 89,297 $ (267,633) The deferred outflows of resources related to pensions, totaling $59.3 million, resulting from District contributions to the Plan subsequent to the measurement date, will be recognized as a reduction of the net pension liability in the fiscal year ended June 30, 2016. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Fiscal Year Ending June 30 Amount 2016 $ (60,666) 2017 (60,666) 2018 (60,666) 2019 (60,666) 2020 3,849 Thereafter 1,155 63

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2015 Actuarial Assumptions. The total pension liability in the July 1, 2014 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement: Inflation Salary Increases Investment rate of return 2.60 percent 3.25 percent, average, including inflation 7.65 percent, net of pension plan investment expense, including inflation Mortality rates were based on the Generational RP-2000 with Projection Scale BB, with adjustments for mortality improvements based on Scale AA. The actuarial assumptions used in the July 1, 2014, valuation were based on the results of an actuarial experience study for the period July 1, 2008, through June 30, 2013 The long-term expected rate of return on pension plan investments was not based on historical returns, but instead is based on a forward-looking capital market economic model. The allocation policy s description of each asset class was used to map the target allocation to the asset classes shown below. Each asset class assumption is based on a consistent set of underlying assumptions, and includes an adjustment for the inflation assumption. The target allocation and best estimates of arithmetic and geometric real rates of return for each major asset class are summarized in the following table: Target Arithmetic (Geometric) Standard Asset Class Allocation (1) Return Return Deviation Cash 1.00% 3.11% 3.10% 1.65% Intermediate-Term Bonds 18.00% 4.18% 4.05% 5.15% High Yield Bonds 3.00% 6.79% 6.25% 10.95% Broad US Equities 26.50% 8.51% 6.95% 18.90% Developed Foreign Equities 21.20% 8.66% 6.85% 20.40% Emerging Market Equities 5.30% 11.58% 7.60% 31.15% Private Equity 6.00% 11.80% 8.11% 30.00% Hedge Funds / Absolute Return 7.00% 5.81% 5.35% 10.00% Real Estate (Property) 12.00% 7.11% 6.35% 13.00% Total 100.00% Assumed inflation - Mean 2.60% 2.00% Note: (1) As outlined in the Plan s investment policy Discount Rate. The discount rate used to measure the total pension liability was 7.65 percent. The Plan s fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the discount rate for calculating the total pension liability is equal to the long-term expected rate of return. Sensitivity of the District s Proportionate Share of the Net Position Liability to Changes in the Discount Rate. The following presents the District s proportionate share of the net pension liability calculated using the discount rate of 7.65 percent, as well as what the District s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower (6.65 percent) or 1-percentage-point higher (8.65 percent) than the current rate (amounts in thousands): 64

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2015 1% Current 1% Decrease Discount Rate Increase (6.65%) (7.65%) (8.65%) District's proportionate share of the net pension liability $ 661,659 $ 154,697 $ (266,999) Pension Plan Fiduciary Net Position. Detailed information about the Plan s fiduciary net position is available in the separately issued FRS Pension Plan and Other State Administered Systems Comprehensive Annual Financial Report. Payables to the Pension Plan. At June 30, 2015, the District reported a payable of $16.2 million for the outstanding amount of contributions to the Plan required for the fiscal year ended June 30, 2015. HIS Pension Plan Plan Description. The HIS Pension Plan (HIS Plan) is a cost-sharing multiple-employer defined benefit pension plan established under section 112.363, Florida Statutes, and may be amended by the Florida Legislature at any time. The benefit is a monthly payment to assist retirees of State-administered retirement systems in paying their health insurance costs and is administered by the Division of Retirement within the Florida Department of Management Services. Benefits Provided. For the fiscal year ended June 30, 2015, eligible retirees and beneficiaries received a monthly HIS payment of $5 for each year of creditable service completed at the time of retirement, with a minimum HIS payment of $30 and a maximum HIS payment of $150 per month, pursuant to Section 112.363, Florida Statutes. To be eligible to receive a HIS Plan benefit, a retiree under a State-administered retirement system must provide proof of health insurance coverage, which may include Medicare. Contributions. The HIS Plan is funded by required contributions from FRS participating employers as set by the Florida Legislature. Employer contributions are a percentage of gross compensation for all active FRS members. For the fiscal year ended June 30, 2015, the contribution rate was 1.26 percent of payroll pursuant to section 112.363, Florida Statues. The District contributed 100 percent of its statutorily required contributions for the current and preceding three years. HIS Plan contributions are deposited in a separate trust fund from which payments are authorized. HIS Plan benefits are not guaranteed and are subject to annual legislative appropriation. In the event the legislative appropriation or available funds fail to provide full subsidy benefits to all participants, benefits may be reduced or canceled. The District s contributions to the HIS Plan totaled $12.2 million for the fiscal year ended June 30, 2015. Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions. At June 30, 2015, the District reported a net pension liability of $309.0 million for its proportionate share of the HIS Plan s net pension liability. The net pension liability was measured as of June 30, 2014, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of July 1, 2014. The District s proportionate share of the net pension liability was based on the District s 2013-14 fiscal year contributions relative to the total 2013-14 fiscal year contributions of all participating members. At June 30, 2014, the District s proportionate share was 3.305 percent, which was an increase of 0.058 from its proportionate share measured as of June 30, 2013. For the fiscal year ended June 30, 2015, the District recognized pension expense of $9.9 million related to the HIS Plan. In addition, the District reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: 65

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2015 Deferred Outflows Deferred Inflows Description of Resources of Resources Change of assumptions $ 10,996 $ - Net difference between projected and actual earnings on HIS pension plan investments 148 - Changes in proportion and differences between District HIS contributions and proportionate share of HIS contributions 4,344 - District contributions subsequent to the measurement date 12,227 - Total $ 27,715 $ - The deferred outflows of resources related to pensions, totaling $12.2 million, resulting from District contributions to the HIS Plan subsequent to the measurement date will be recognized as a reduction of the net pension liability in the fiscal year ended June 30, 2016. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Fiscal Year Ending June 30 Amount 2016 $ 2,511 2017 2,511 2018 2,511 2019 2,511 2020 2,475 Thereafter 2,969 Actuarial Assumptions. The total pension liability in the July 1, 2014, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement: Inflation 2.60 percent Salary Increases 3.25 percent, average, including inflation Municipal Bond Rate 4.29 percent Mortality rates were based on the Generational RP-2000 with Projected Scale BB. The actuarial assumptions used in the July 1, 2014 valuation were based on the results of an actuarial experience study for the period July 1, 2008, through June 30, 2013. Discount Rate. The discount rate used to measure the total pension liability was 4.29 percent. In general, the discount rate for calculating the total pension liability is equal to the single rate equivalent to discounting at the long-term expected rate of return for benefit payments prior to the projected depletion date. Because the HIS benefit is essentially funded on a pay-as-you-go basis, the depletion date is considered to be immediate, and the single equivalent discount rate is equal to the municipal bond rate selected by the HIS Plan sponsor. The Bond Buyer General Obligation 20-Bond Municipal Bond Index was adopted as the applicable municipal bond index Sensitivity of the District s Proportionate Share of the Net Pension Liability to Changes in the Discount Rate. The following presents the District s proportionate share of the net pension liability calculated using the discount rate of 4.29 percent, as well as what the District s proportionate share of the net pension liability would be if 66

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2015 it were calculated using a discount rate that is 1-percentage-point lower (3.29 percent) or 1-percentage-point higher (5.29 percent) than the current rate (amounts in thousands): 1% Current 1% Decrease Discount Rate Increase (3.29%) (4.29%) (5.29%) District's proportionate share of the net pension liability $ 351,475 $ 309,011 $ 273,566 Pension Plan Fiduciary Net Position. Detailed information about the HIS Plan s fiduciary net position is available in the separately issued FRS Pension Plan and Other State Administered Systems Comprehensive Annual Financial Report. Payables to the Pension Plan. At June 30, 2015, the District reported a payable of $2.3 million for the outstanding amount of contributions to the HIS Plan required for the fiscal year ended June 30, 2015. FRS Defined Contribution Pension Plan The District contributes to the FRS Investment Plan (Investment Plan), a defined contribution pension plan, for its eligible employees electing to participate in the Investment Plan. The Investment Plan is administered by the SBA, and is reported in the SBA s annual financial statements and in the State of Florida Comprehensive Annual Financial Report. Service retirement benefits are based upon the value of the member s account upon retirement. As provided in Section 121.4501, Florida Statutes, eligible FRS members may elect to participate in the Investment Plan in lieu of the FRS defined-benefit plan. District employees participating in DROP are not eligible to participate in the Investment Plan. Employer and employee contributions, including amounts contributed to individual member s accounts, are defined by law, but the ultimate benefit depends in part on the performance of investment funds. Benefit terms, including contribution requirements, for the Investment Plan are established and may be amended by the Florida Legislature. The Investment Plan is funded with the same employer and employee contribution rates that are based on salary and membership class (Regular Class, Elected County Officers, etc.), as the FRS defined benefit plan. Contributions are directed to individual member accounts, and the individual members allocate contributions and account balances among various approved investment choices. Allocations to the investment member s accounts during the 2014-15 fiscal year were as follows: Class 67 Percent of Gross Compensation FRS, Regular 6.30 FRS, Elected County Officers 11.34 FRS, Senior Management Service 7.67 FRS, Special Risk Regular 14.00 For all membership classes, employees are immediately vested in their own contributions and are vested after one year of service for employer contributions and investment earnings. If an accumulated benefit obligation for service credit originally earned under the FRS Pension Plan is transferred to the Investment Plan, the member must have the years of service required for FRS Pension Plan vesting (including the service credit represented by the transferred funds) to be vested for these funds and the earnings on the funds. Nonvested employer contributions are placed in a suspense account for up to five years. If the employee returns to FRS-

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2015 covered employment within the five year period, the employee will regain control over their account. If the employee does not return within the five year period, the employee will forfeit the accumulated account balance. Costs of administering the Investment Plan, including the FRS Financial Guidance Program, are funded through an employer contribution of 0.04 percent of payroll and by forfeited benefits of Investment Plan members. For the fiscal year ended June 30, 2015, the information for the amount of forfeitures was unavailable from the SBA; however, management believes that these amounts, if any, would be immaterial to the District. After termination and applying to receive benefits, the member may rollover vested funds to another qualified plan, structure a periodic payment under the Investment Plan, receive a lump-sum distribution, leave the funds invested for future distribution, or any combination of these options. Disability coverage is provided; the member may either transfer the account balance to the FRS Pension Plan when approved for disability retirement to receive guaranteed lifetime monthly benefits under the FRS Pension Plan, or remain in the Investment Plan and rely upon that account balance for retirement income. The District s Investment Plan pension expense totaled $13.2 million for the fiscal year ended June 30, 2015. Payables to the Investment Plan. At June 30, 2015, the District reported a payable of $1.9 million for the outstanding amount of contributions to the Investment Plan required for the fiscal year ended June 30, 2015. 13. POST EMPLOYMENT BENEFITS OTHER THAN PENSIONS The District follows the guidance contained in Governmental Accounting Standards Board Statement No. 45, Accounting and Reporting by Employers for Post-Employment Benefits Other than Pensions (GASB 45); for certain post employment health care benefits provided by the District for the fiscal year ended June 30, 2015. Plan Description Pursuant to Section 112.0801, Florida Statutes, the District is required to permit participation in the health insurance program by retirees and their eligible dependents at a cost to the retiree that is no greater than the cost at which coverage is available for active employees. Retirees pay 100% of the blended (active and retiree combined) equivalent premium rates. The blended rates provide an implicit subsidy for retirees because, on an actuarial basis, their current and future claims are expected to result in higher costs to the plan on average than those of active employees. The plan is a single employer plan. Funding Policy The District is financing the post-employment benefits on a pay-as-you-go basis. Expenditures for these insurance premiums are prorated between the General Fund and other funds where the personnel are located. For fiscal year 2015, 1,174 retirees received health care benefits. The District provided required contributions of approximately $5.6 million toward the annual OPEB cost. Retiree contributions totaled approximately $6.4 million. 68

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2015 Annual OPEB Cost and Net OPEB Obligation The District s annual Other Post Employment Benefit (OPEB) cost (expense) is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover the normal cost each year to amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. The following table shows the components of the District s annual OPEB cost for the year, the amount actually contributed to the plan, and changes in the District s net OPEB obligation to the retiree health plan (amounts in thousands): Annual Required Contribution $ 12,084 Interest on Net OPEB Obligation 3,826 Adjustment to Annual Required Contribution (3,904) Annual OPEB Cost (Expense) 12,006 Contribution Towards OPEB Cost (5,613) Increase in Net OPEB Obligation 6,393 Net OPEB Obligation - Beginning of Year 95,639 Net OPEB Obligation - End of Year $ 102,032 The District s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation as of June 30, 2015, was as follows (amounts in thousands): Fiscal Year Ended Annual OPEB Cost Percentage of Annual OPEB Cost Contributed Net OPEB Obligation June 30, 2015 $ 12,006 47% $ 102,032 June 30, 2014 13,311 37% 95,639 June 30, 2013 12,678 32% 87,297 Funded Status and Funding Progress As of June 30, 2015, the actuarial accrued liability for benefits was $135.6 million, all of which was unfunded. The covered payroll (annual payroll of active employees covered by the plan) was $966.1 million, and the ratio of the unfunded actuarial accrued liability to the covered payroll was 14.0%. The projection of future benefit payments for an ongoing plan involves estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements presents multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Methods and Assumptions Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the longterm perspective of the calculations. 69

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2015 The Projected Unit Cost method (PUC) with benefits attributed from date of hire to expected retirement age was used in the actuarial valuation as of July 1, 2014. The unfunded actuarial accrued liability is amortized over the maximum acceptable period of thirty years on an open basis. It is calculated assuming a level dollar percentage. The remaining amortization period at June 30, 2014 is thirty years (open method). The following assumptions were made: Retirement Age Annual retirement probabilities have been determined based on the Florida Retirement System Actuarial Valuation as of July 1, 2014. Covered Spouses Assumed number of eligible spouses is based on the current census information. Per Capita Health Claim Cost Per capita health claim costs are developed from a combination of historical claim experience and manual claim costs developed using a representative database. The per capita cost at age 60 is $11,484 and at age 70 is $6,030. Age Based Morbidity The assumed per capita health claim costs are adjusted to reflect expected increases related to age. The increase in per capita heath claim costs related to age range from 3.19% to 5.06% under age 65 and from 0.05% to 3.00% over age 65. Mortality Life expectancies were based on mortality tables from the National Center for Health Statistics. The RP-2014 Table projected to 2030 using Scale MP-14 and applied on a gender specific basis. Healthcare Cost Trend Rate The expected rate of increase in healthcare insurance premiums was based on District historical experience, our market-place knowledge and macro-economic theory. A rate of 8.0% for under age 65 and 7.0% over age 65 initially, reduced 0.5% each year until reaching the ultimate trend rate of 4.5%. Retiree Contributions Retiree contributions are assumed to increase with healthcare cost trend. Non-Claim Expenses Non-claim expenses are based on the current amounts charged per retired employee. Termination The rate of withdrawal for reasons other than death and retirement has been developed from the Florida Retirement System Actuarial Valuation as of July 1, 2014. The annual termination probability is dependent on an employee s age, gender, and years of service. Plan Participation Percentage It is assumed that 30% of all future retirees and their dependents who are eligible for benefits participate in the post-employment benefit plan in fiscal year 2015. Census Data The census data was provided as of May 2015. Salary Increase Assumption 2.5% per annum. Discount Rate 4% per annum Inflation Rate 3% 70

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2015 14. NET POSITION AND FUND BALANCE REPORTING Net Position The government-wide statement of net position reports all financial and capital resources of the District, as well as assets/deferred outflows of resources and liabilities/deferred inflows of resources. The difference between assets/deferred outflows of resources and liabilities/deferred inflows of resources are reported as net position. Net position is displayed in three components: Net investment in capital assets: Capital assets, net of accumulated depreciation and reduced by the outstanding balance of debt that is attributable to the acquisition, constructions, or improvement in three components. Restricted net position: Net position where constraints on their use are: (1) externally imposed by creditors, grantors, contributors, laws, or regulation of other governments, or (2) imposed by law through constitutional provisions or enabling legislation. Unrestricted net position (deficit): This amount represents the accumulated results of all past years operations not included in the above two components. The deficit in the net position of governmental activities is due to long-term liabilities, including compensated absences and pensions. Net position is categorized as follows: a) Net Investment in Capital Assets is intended to reflect the portion of net position which are associated with capital assets, less outstanding capital assets related debt, net of unspent bond and loan proceeds. b) Restricted Net Position have third party (statutory, bond covenant or granting agency) limitations on their use, or enabling legislation. c) Unrestricted Net Position have no third party limitations on their use. While District management may have categorized and segmented portions for various purposed, the School Board has the unrestricted authority to revisit or alter theses managerial decisions. Fund Balance GASB 54 categorizes fund balance as either nonspendable or spendable. Nonspendable is defined as the portion of fund balance that includes amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required to be maintained intact. District nonspendable items include inventories. Spendable is defined as a hierarchy of fund balance classifications that is available to be spent based on the element to which the District is bound to observe constraints imposed upon the use of resources: Restricted fund balance is constrained by external parties, and constitutional provisions or enabling legislation. District restricted balances includes: Carryover balances as a result of revenue received with constraints from Federal laws, Florida Statute, Florida School Board Rules, local ordinances or contract provisions. Committed fund balance can only be used for specific purposes pursuant to constraints imposed by formal action of the School Board. District committed balance includes: Funds committed by the School Board on June 2, 2010 for future purchase and installation of equipment needed to transmit and receive programming for The Education Network (TEN). Assigned fund balances are amounts that are constrained by the School Board or Superintendent to be used for a specific purpose. Florida Statute 1001.51, Duties and Responsibilities of District School Superintendent, delegates certain financial authority to the Superintendent. Unassigned fund balance is the residual classification for the general fund. 71

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2015 Restricted or unrestricted amounts are considered spent when an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available. Committed amounts would be reduced first, followed by assigned amounts, and then unassigned amounts when expenditures are incurred for purposes for which amounts in any of those unrestricted fund balance classifications could be used. The District has not established a stabilization arrangement. Instead, the Board has established policy 2.55, Fund Balance for Contingency to set aside 3% of total annual operating fund appropriations and transfers from the operating fund to cover unanticipated financial needs and to avoid a budget deficit. At the end of the fiscal year, the unassigned general fund balance was $50.0 million or 3.3% of general fund total expenditures. 72

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2015 General Fund Major Funds COPS Debt Service Capital Improvement Other Non-Major Governmental Total Governmental FUND BALANCES: Nonspendable: Inventory: Textbooks $ 7,402 $ - $ - $ - $ 7,402 Child Nutrition - - - 3,200 3,200 Warehouse 1,225 - - - 1,225 Other 389 - - - 389 Total Nonspendable 9,016 - - 3,200 12,216 Restricted for: Categorical carryover programs 1,957 - - - 1,957 IB, AP, AICE & Industry cert prog 7,890 - - - 7,890 School Improvement 1,479 - - - 1,479 Workforce development 16,779 - - - 16,779 Child nutrition - - - 24,279 24,279 Debt service - 91,182-3,589 94,771 Capital projects - - 25,942 23,132 49,074 Total Restricted 28,105 91,182 25,942 51,000 196,229 Committed to: The Education Network program - - - 85 85 Total Committed - - - 85 85 Assigned to: School Operations Instruction 59 - - - 59 Instructional support services 10 - - - 10 Board 67 - - - 67 Central services 302 - - - 302 Operation of plant 824 - - - 824 Community services: After care/summer camp 7,485 - - - 7,485 Pre-K/VPK Fee Based Activities 132 - - - 132 Community Schools 1,038 - - - 1,038 Other 56 - - - 56 Capital projects 220 - - 38,006 38,226 Misc local grants/donations 1,868 - - - 1,868 Next year budget appropriations 17,950 - - - 17,950 Total Assigned 30,011 - - 38,006 68,017 Unassigned 50,000 - - - 50,000 Total fund balance $ 117,132 $ 91,182 $ 25,942 $ 92,291 $ 326,547 73

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2015 15. COMMITMENTS AND CONTINGENCIES The District receives funding from the State that is based, in part, on a computation of the number of full time equivalent ("FTE") students enrolled in different types of instructional programs. The accuracy of data compiled by individual schools supporting the FTE count is subject to State audit and, if found to be in error, could result in refunds or in decreases in future funding allocations. It is the opinion of management that any amounts of revenue which may be remitted back to the State due to additional errors in the FTE count, if any, will not be material to the financial position of the District. The District received financial assistance from Federal and State agencies in the form of grants. The disbursement of funds received under these programs generally requires compliance with terms and conditions specified in the grant agreements and are subject to audit by the grantor agencies. Any disallowed claims resulting from such audits could become a liability of the general fund or other applicable funds. However, in the opinion of management, any such disallowed claims will not have a material effect on the overall financial position of the District. The District is involved in various lawsuits arising in the ordinary course of operations. In the opinion of management, the District s estimated aggregate liability with respect to probable losses has been provided for in the estimated liability for insurance risks and pending claims in the accompanying financial statements, after giving consideration to the District s related insurance coverage, as well as the Florida statutory limitations of governmental liability on uninsured risks. It is the opinion of management in consultation with legal counsel that the final settlements of these matters will not result in a material adverse effect on the financial position of the District. As part of its capital outlay program, the District has entered into various construction contracts. The District s construction commitments of $5.7 million and other encumbrances of $1.9 million as of June 30, 2015 are shown below (amounts in thousands): Construction Encumbrances Commitments Total General Fund $ 1,318 $ - $ 1,318 Capital Improvement - 2,104 2,104 Other Non-Major Governmental 578 3,592 4,170 Total Commitments $ 1,896 $ 5,696 $ 7,592 The District entered into a voluntary non-exchange transaction with Dell Marketing L.P. On October 30, 2012 Dell Marketing, L.P. (Dell) agreed to provide $7.0 million in hardware to the District contingent upon Dell receiving a $12.0 million purchase order from the District by November 1, 2012 for computers and associated peripheral items. The District received $7.1 million of donated hardware as of June 30, 2015 ($0.3 million in the current year and $6.8 million in the prior years) and recorded the value of the items received as revenue and expenditure in governmental activities. 16. SUBSEQUENT EVENTS On July 2, 2015, the District entered into a loan agreement with Banc of America Public Capital Corp 2015 for financing the acquisition of 120 buses and other equipment of $14.2 million issue a coupon rate of 1.242%. Under the terms of the loan agreement the debt is payable over five years. On September 22, 2015, the District issued $63.0 million in Certificates of Participation, Series 2015C to refund the Series 2007B Certificates owned by Morgan Stanley. Refinancing the Series 2007B will generate $6.7 million or 9.92% net present value savings. The series 2015C Certificates possess an underlying credit rating of Aa3 and AA- Moody s and Fitch, respectively. 74

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2015 On September 22, 2015 the District issued Tax Anticipation Notes ( TANS ) Series 2015. The $115.0 million issue a coupon rate of 1.0% with an effective yield of 0.08%. The notes are dated October 5, 2015 and are due February 1, 2016. On November 18, 2015, the District entered into a loan agreement with Banc of America Public Capital Corp 2015A for financing the acquisition of Air Conditioner Chillers of $7.2 million. The $7.2 million issue a coupon rate of 1.274% and under the terms of the loan agreement the debt is payable over five years. 75

76

2015 2014 District's proportion of the FRS net pension liability (asset) n/a 2.5354% District's proportionate share of the FRS net pension liability (asset) n/a $ 154,697 District's covered-employee payroll $ 966,098 $ 971,624 District's proportionate share of the FRS net pension liability (asset) as a percentage of its covered-employee payroll n/a 15.92% FRS Plan fiduciary net position as a percentage of the total pension liability n/a 96.09% 2015 2014 Contractually required FRS contribution $ 59,324 $ 55,536 FRS contributions in relation to the contractually required contribution (59,324) (55,536) FRS contribution deficiency (excess) $ - $ - District's covered-employee payroll $ 966,098 $ 971,624 FRS contributions as a percentage of covered-employee payroll 6.14% 5.72% 2015 2014 District's proportion of the HIS net pension liability (asset) n/a 3% District's proportionate share of the HIS net pension liability (asset) n/a $ 309,012 District's covered-employee payroll $ 966,098 $ 971,624 District's proportionate share of the HIS net pension liability (asset) as a percentage of its covered-employee payroll n/a 32% HIS Plan fiduciary net position as a percentage of the total pension liability n/a 0.99% 2015 2014 Contractually required HIS contribution $ 12,227 $ 11,321 HIS contributions in relation to the contractually required HIS contribution (12,227) (11,321) HIS contribution deficiency (excess) $ - $ - District's covered-employee payroll $ 966,098 $ 971,624 HIS contributions as a percentage of covered-employee payroll 1.27% 1.17% 77

COMBINING AND INDIVIDUAL FUND STATEMENTS AND SCHEDULES

Non-major Governmental Funds Special Revenue Funds Special Revenue Funds are maintained to account for the proceeds of specific revenue sources that are legally restricted to expenditures for specific purposes. Food Services Fund To account for all School District cafeteria and food service programs. Other Special Revenue Fund To account for federal, state and local grant revenue sources which are legally restricted. Federal Economic Stimulus Programs Fund To account for targeted assistance funds received from the State of Florida under the American Recovery and Reinvestment Act (ARRA) with the intended use of avoiding job losses. Debt Service Funds Debt Service Funds are maintained to account for the payment of interest and principal requirements on long-term debt. State Board of Education/Capital Outlay Bond Indebtedness (SBE/COBI) Fund To account for the repayment of the State Board of Education Capital Outlay Bonds. Buses and Equipment Debt Service Fund To account for the repayment of loans used to acquire buses and other equipment. ARRA Qualified School Construction Bonds (QSCB) Fund To account for the payment of interest and principal of ARRA Qualified School Construction Bonds.

Non-major Governmental Funds Capital Projects Funds Capital Outlay Bond Indebtedness (COBI) Fund To account for the repayment of the State Board of Education Capital Outlay Bonds Capital Outlay and Debt Service (CO & DS) Fund To account for capital projects financed through the District s allocation of the state Capital Outlay and Debt Service program. Sales Tax Fund To account for locally received funds, primarily sales tax revenue, for the acquisition, construction or renovation of capital facilities, including land and equipment. Buses and Equipment Capital Fund To account for the acquisition of the buses and other equipment financed by loans. COPS Fund Certificates of Participation ( COPS ) capital projects fund accounts for construction projects and equipment purchases financed by sale of certificates of participation. Other Capital Projects Fund To account for various other miscellaneous revenues designated for construction projects.

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA COMBINING BALANCE SHEET NON-MAJOR GOVERNMENTAL FUNDS JUNE 30, 2015 (amounts expressed in thousands) SPECIAL REVENUE FUNDS DEBT SERVICE FUNDS FEDERAL OTHER ECONOMIC FOOD SPECIAL STIMULUS SBE/COBI BUSES & ARRA SERVICES REVENUE PROGRAMS BONDS EQUIPMENT QSCB ASSETS Cash, cash equivalents and investments $ 25,615 $ 589 $ - $ 420 $ 1,436 $ 1,827 Due from other governments or agencies 1,900 13,489 - - - - Inventories 3,200 - - - - - Other assets - 42 - - - - TOTAL ASSETS $ 30,715 $ 14,120 $ - $ 420 $ 1,436 $ 1,827 LIABILITIES AND FUND BALANCES LIABILITIES Accounts and contracts payable 1,749 3,098-94 - - Accrued payroll and payroll deductions 1,465 7,013 - - - - Due to other funds - 3,000 - - - - Retainage payable on contracts 22 3 - - - - Unearned revenue - 921 - - - - TOTAL LIABILITIES 3,236 14,035-94 - - DEFERRED INFLOWS Unavailable Revenue - - - - - - TOTAL DEFERRED INFLOWS - - - - - - FUND BALANCES Nonspendable 3,200 - - - - - Restricted 24,279 - - 326 1,436 1,827 Committed - 85 - - - - Assigned - - - - - - TOTAL FUND BALANCES 27,479 85-326 1,436 1,827 TOTAL LIABILITIES AND FUND BALANCES $ 30,715 $ 14,120 $ - $ 420 $ 1,436 $ 1,827 82

CAPITAL PROJECTS FUNDS TOTAL OTHER NON-MAJOR SALES BUSES & CAPITAL GOVERNMENTAL COBI CO & DS TAX EQUIPMENT COPS PROJECTS FUNDS $ 477 $ - $ 4,876 $ - $ 19,662 $ 38,495 $ 93,397 - - - - - 7 15,396 - - - - - - 3,200 - - - - - - 42 $ 477 $ - $ 4,876 $ - $ 19,662 $ 38,502 $ 112,035 4-2 - 738 202 5,887 - - - - - 115 8,593 - - - - - - 3,000 - - 143-1,090 78 1,336 - - - - - 7 928 4-145 - 1,828 402 19,744 - - - - - - - - - - - - - - - - - - - - 3,200 473-4,731-17,834 94 51,000 - - - - - - 85 - - - - - 38,006 38,006 473-4,731-17,834 38,100 92,291 $ 477 $ - $ 4,876 $ - $ 19,662 $ 38,502 $ 112,035 83

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NON-MAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2015 (amounts expressed in thousands) SPECIAL REVENUE FUNDS DEBT SERVICE FUNDS FEDERAL OTHER ECONOMIC FOOD SPECIAL STIMULUS SBE/COBI BUSES & ARRA SERVICES REVENUE PROGRAMS BONDS EQUIPMENT QSCB REVENUES Local sources: Food service sales $ 13,270 $ - $ - $ - $ - $ - Impact fees - - - - - - Interest income and other 57 - - - - - Local grants and other 23 3,685 - - - - Total local sources 13,350 3,685 - - - - State sources: Capital outlay and debt service - - - 5,015 - - Food service 1,015 - - - - State grants and entitlements - 1,311 - - - - Total state sources 1,015 1,311-5,015 - - Federal sources: Federal grants and entitlements - 113,827 218 - - 3,257 National school lunch act 65,453 - - - - - Total federal sources 65,453 113,827 218 - - 3,257 TOTAL REVENUES 79,818 118,823 218 5,015-3,257 EXPENDITURES: Current: Instruction - 56,947 - - - - Instructional support services - 56,308 213 - - - Board - 50 - - - - General administration - 2,561 5 - - - School administration - 4 - - - - Facilities acquisition and construction - - - - - - Fiscal services - 68 - - - - Food services 76,694 - - - - - Central services - 955 - - - - Pupil transportation services - 405 - - - - Operation of plant - 32 - - - - Administrative Tehnology - 79 - - - - Community services - 751 - - - - Total Current Expenditures 76,694 118,160 218 - - - 84

CAPITAL PROJECTS FUNDS TOTAL OTHER NON-MAJOR SALES BUSES & CAPITAL GOVERNMENTAL COBI PECO CO & DS TAX EQUIPMENT COPS PROJECTS FUNDS $ - $ - $ - $ - $ - $ - $ - $ 13,270 - - - - - - 22,568 22,568 - - - 17 1 15 84 174 - - - - - - 1,495 5,203 - - - 17 1 15 24,147 41,215 - - 2,039 - - - - 7,054 - - - - - - - 1,015-3,405 - - - - 4,777 9,493-3,405 2,039 - - - 4,777 17,562 - - - - - - - 117,302 - - - - - - - 65,453 - - - - - - - 182,755-3,405 2,039 17 1 15 28,924 241,532 - - - - - - - 56,947 - - - - - - - 56,521 - - - - - - - 50 - - - - - - - 2,566 - - - - - - - 4 1,218 - - 876 347 338 3,237 6,016 - - - - - - - 68 - - - - - - - 76,694 - - - - - - - 955 - - - - - - - 405 - - - - - - - 32 - - - - - - - 79 - - - - - - - 751 1,218 - - 876 347 338 3,237 201,088 (Continued) 85

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NON-MAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2015 (amounts expressed in thousands) SPECIAL REVENUE FUNDS DEBT SERVICE FUNDS FEDERAL OTHER ECONOMIC FOOD SPECIAL STIMULUS SBE/COBI BUSES & ARRA SERVICES REVENUE PROGRAMS BONDS EQUIPMENT QSCB Capital outlay 1,379 764 - - - - Debt service: Retirement of principal - - - 4,220 4,217 - Interest - - - 907 146 3,654 Fiscal charges - - - 10 1 8 TOTAL EXPENDITURES 78,073 118,924 218 5,137 4,364 3,662 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES 1,745 (101) - (122) (4,364) (405) OTHER FINANCING SOURCES (USES): Transfers in - - - - 2,928 2,104 Transfers out - - - - - - Issuance of Long-Term and Refunded Debt - - - 4,275 - - Net premium (discount) from issuance of long-term and refunded debt - - - 305 - - Payments to Refunded Debt Escrow Agent - - - (4,667) - - TOTAL OTHER FINANCING SOURCES (USES) - - - (87) 2,928 2,104 NET CHANGE IN FUND BALANCES 1,745 (101) - (209) (1,436) 1,699 FUND BALANCES, JULY 1, 2014 25,734 186-535 2,872 128 FUND BALANCES, JUNE 30, 2015 $ 27,479 $ 85 $ - $ 326 $ 1,436 $ 1,827 86

CAPITAL PROJECTS FUNDS TOTAL OTHER NON-MAJOR SALES BUSES & CAPITAL GOVERNMENTAL COBI PECO CO & DS TAX EQUIPMENT COPS PROJECTS FUNDS - - - 3,016 12,921 24,939 1,430 44,449 - - - - - - - 8,437 - - - - - - - 4,707 - - 4 - (7) - - 16 1,218-4 3,892 13,261 25,277 4,667 258,697 (1,218) 3,405 2,035 (3,875) (13,260) (25,262) 24,257 (17,165) - - - - - - 125 5,157 - (3,405) (2,092) - (47) - (22,374) (27,918) - - - - - - - 4,275 - - - - - - - 305 - - - - - - - (4,667) - (3,405) (2,092) - (47) - (22,249) (22,848) (1,218) - (57) (3,875) (13,307) (25,262) 2,008 (40,013) 1,691-57 8,606 13,307 43,096 36,092 132,304 $ 473 $ - $ - $ 4,731 $ - $ 17,834 $ 38,100 $ 92,291 (Concluded) 87

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS JUNE 30, 2015 (amounts expressed in thousands) WORKERS TOTAL HEALTH COMP & CLAIMS INTERNAL INSURANCE INSURANCE SERVICE FUND FUND FUNDS ASSETS Current Assets: Cash, cash equivalents and investments $ 95,983 $ 7,886 $ 103,869 Due from Other Agencies 2,357-2,357 Total Current Assets 98,340 7,886 106,226 Noncurrent Assets: Restricted cash 1,551 1,995 3,546 Total Noncurrent Assets 1,551 1,995 3,546 TOTAL ASSETS $ 99,891 $ 9,881 $ 109,772 LIABILITIES Current liabilities: Accounts and contracts payable $ 2,133 $ 81 $ 2,214 Accrued payroll and payroll deductions 39 29 68 Portion due or payable within one year: Estimate unpaid claims 13,000 9,538 22,538 Total Current Liabilities 15,172 9,648 24,820 Noncurrent liabilities: Portion due or payable after one year: Liability for compensated absences 131 91 222 Estimate unpaid claims - 34,291 34,291 Other post-employment benefits obligation 57 49 106 Total Noncurrent Liabilities 188 34,431 34,619 TOTAL LIABILITIES 15,360 44,079 59,439 NET POSITION Unrestricted $ 84,531 $ (34,198) $ 50,333 88

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION INTERNAL SERVICE FUNDS FOR THE YEAR ENDED JUNE 30, 2015 (amounts expressed in thousands) WORKERS TOTAL HEALTH COMP & CLAIMS INTERNAL INSURANCE INSURANCE SERVICE FUND FUND FUNDS OPERATING REVENUES: Premium revenue $ 181,910 $ 16,799 $ 198,709 Other operating revenue 9,663 500 10,163 TOTAL REVENUES 191,573 17,299 208,872 OPERATING EXPENSES: Salaries 628 505 1,133 Benefits 183 155 338 Purchased services 314 19 333 Claims and other expenses 179,153 18,189 197,342 TOTAL OPERATING EXPENSES 180,278 18,868 199,146 OPERATING INCOME (LOSS) 11,295 (1,569) 9,726 NONOPERATING REVENUES: Interest and other income 164 11 175 TOTAL NONOPERATING REVENUES 164 11 175 CHANGE IN NET POSITION 11,459 (1,558) 9,901 NET POSITION - Beginning of year 73,072 (32,640) 40,432 NET POSITION - End of year $ 84,531 $ (34,198) $ 50,333 89

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS FOR THE YEAR ENDED JUNE 30, 2015 (amounts expressed in thousands) WORKERS TOTAL HEALTH COMP & CLAIMS INTERNAL INSURANCE INSURANCE SERVICE FUND FUND FUNDS CASH FLOWS FROM OPERATING ACTIVITIES: Cash receipts from customers and interfund services provided $ 181,910 $ 16,799 $ 198,709 Cash payments for claims and administration (178,707) (13,275) (191,982) Cash payments for salaries and benefits (808) (660) (1,468) Other receipts 8,469 500 8,969 Net cash provided by operating activities 10,864 3,364 14,228 CASH FLOWS FROM INVESTING ACTIVITIES: Interest earnings on investments 164 11 175 Net cash provided by investing activities 164 11 175 Net increase in cash and cash equivalents 11,028 3,375 14,403 Cash and cash equivalents, beginning of year* 86,506 6,506 93,012 Cash and cash equivalents, end of year* $ 97,534 $ 9,881 $ 107,415 RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED IN OPERATING ACTIVITIES: Operating income (loss) $ 11,295 $ (1,569) $ 9,726 Adjustments to reconcile operating income to net cash provided (used) in operating activities: Changes in assets and liabilities: (Increase) decrease in due from agencies (1,194) - (1,194) Increase (decrease) in accounts payable 760 (60) 700 Increase (decrease) in payroll and payroll deductions 3-3 Increase (decrease) in estimated unpaid claims - 4,993 4,993 Total adjustments (431) 4,933 4,502 Net cash provided by operating activities $ 10,864 $ 3,364 $ 14,228 *Includes restricted cash 90

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA DEBT SERVICE FUNDS - COPS DEBT SERVICE BUDGETARY COMPARISON SCHEDULE FOR THE YEAR ENDED JUNE 30, 2015 (amounts expressed in thousands) Variances - Actual Positive (Negative) Budgeted Amounts (Budgetary Original Final Original Final Basis) to Final to Actual REVENUES Local sources: Interest income, local grants and other $ - $ 90 $ 90 $ 90 $ - TOTAL REVENUES - 90 90 90 - EXPENDITURES: Debt service: Retirement of principal 66,535 66,385 66,385 150 - Interest 72,841 68,764 68,764 4,077 - Fiscal Charges 1,727 1,940 1,940 (213) - TOTAL EXPENDITURES 141,103 137,089 137,089 4,014 - DEFICIENCY OF REVENUES UNDER EXPENDITURES (141,103) (136,999) (136,999) 4,104 - OTHER FINANCING SOURCES (USES): Issuance of long-term and refunded debt 33,280 506,770 506,770 473,490 - Net premium (discount) from issuance of long-term and refunded debt 2,208 67,669 67,669 65,461 - Payments to refunded debt escrow agent - (594,753) (594,753) (594,753) - Transfer from Capital Project Fund 146,050 141,360 141,360 (4,690) - TOTAL OTHER FINANCING SOURCES 181,538 121,046 121,046 (60,492) - NET CHANGE IN FUND BALANCE $ 40,435 $ (15,953) (15,953) $ (56,388) $ - FUND BALANCE, JULY 1, 2014 (GAAP BASIS) 107,135 FUND BALANCE, JUNE 30, 2015 (BUDGETARY BASIS) 91,182 Adjustments To Conform With GAAP: Elimination of encumbrances - FUND BALANCE, JUNE 30, 2015 (GAAP BASIS) $ 91,182 91

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA CAPITAL PROJECTS FUNDS - CAPITAL IMPROVEMENT BUDGETARY COMPARISON SCHEDULE FOR THE YEAR ENDED JUNE 30, 2015 (amounts expressed in thousands) Variances - Actual Positive (Negative) Budgeted Amounts (Budgetary Original Final Original Final Basis) to Final to Actual REVENUES: Local sources: District local capital improvement tax $ 216,148 $ 216,293 $ 216,293 $ 145 $ - Interest income, local grants and other 350 365 714 15 349 TOTAL REVENUES 216,498 216,658 217,007 160 349 EXPENDITURES: Facilities acquisitions and construction: Buildings and fixed equipment 2,497 5,139 63 (2,642) 5,076 Furniture, fixtures and equipment 19,350 18,517 13,093 833 5,424 Motor vehicles 259 1,492 1,445 (1,233) 47 Land 98 98 1-97 Improvements other than buildings 2,104 2,647 1,630 (543) 1,017 Remodeling and renovations 9,103 8,888 3,139 215 5,749 Computer software 325 595 432 (270) 163 TOTAL EXPENDITURES 33,736 37,376 19,803 (3,640) 17,573 EXCESS OF REVENUES OVER EXPENDITURES 182,762 179,282 197,204 (3,480) 17,922 OTHER FINANCING USES: Transfers to the general fund (63,944) (63,520) (63,520) 424 - Transfers to debt service funds (149,401) (146,345) (146,345) 3,056 - TOTAL OTHER FINANCING USES (213,345) (209,865) (209,865) 3,480 - NET CHANGE IN FUND BALANCE $ (30,583) $ (30,583) (12,661) $ - $ 17,922 FUND BALANCE, JULY 1, 2014 (GAAP BASIS) 36,499 FUND BALANCE, JUNE 30, 2015 (BUDGETARY BASIS) 23,838 Adjustments To Conform With GAAP: Elimination of encumbrances 2,104 FUND BALANCE, JUNE 30, 2015 (GAAP BASIS) $ 25,942 92

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA SPECIAL REVENUE FUND - FOOD SERVICE BUDGETARY COMPARISON SCHEDULE FOR THE YEAR ENDED JUNE 30, 2015 (amounts expressed in thousands) Variances - Actual Positive (Negative) Budgeted Amounts (Budgetary Original Final Original Final Basis) to Final to Actual REVENUES: Local sources: Interest income and other $ 40 $ 57 $ 57 $ 17 $ - Food service sales 14,510 13,270 13,270 (1,240) - Miscellaneous local sources 176 23 23 (153) - Total local sources 14,726 13,350 13,350 (1,376) - State sources: School breakfast/lunch supplement 900 1,015 1,015 115 - Total state sources 900 1,015 1,015 115 - Federal sources: National school lunch act 66,409 65,453 65,453 (956) - Total federal sources 66,409 65,453 65,453 (956) - TOTAL REVENUES 82,035 79,818 79,818 (2,217) - EXPENDITURES: Food service: Salaries 19,778 18,842 18,845 936 (3) Employee benefits 10,639 8,404 8,404 2,235 - Purchased services 8,605 8,670 8,702 (65) (32) Energy services 2,641 2,445 2,445 196 - Materials and supplies 37,609 35,908 35,908 1,701 - Capital outlay 2,800 2,177 2,567 623 (390) Other expenses 2,172 1,627 1,627 545 - TOTAL EXPENDITURES 84,244 78,073 78,498 6,171 (425) EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (2,209) 1,745 1,320 3,954 (425) NET CHANGE IN FUND BALANCE $ (2,209) $ 1,745 1,320 $ 3,954 $ (425) FUND BALANCE, JULY 1, 2014 (GAAP BASIS) 25,734 FUND BALANCE, JUNE 30, 2015 (BUDGETARY BASIS) 27,054 Adjustment To Conform With GAAP: Elimination of encumbrances 425 FUND BALANCE, JUNE 30, 2015 (GAAP BASIS) $ 27,479 93

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA BUDGETARY COMPARISON SCHEDULE OTHER SPECIAL REVENUE FUND FOR THE YEAR ENDED JUNE 30, 2015 (amounts expressed in thousands) Variances - Actual Positive (Negative) Budgeted Amounts (Budgetary Original Final Original Final Basis) to Final to Actual REVENUES: Local sources $ 435 $ 4,768 $ 3,685 $ 4,333 $ (1,083) State sources 330 1,333 1,311 1,003 (22) Federal sources 109,486 134,106 113,827 24,620 (20,279) TOTAL REVENUES 110,251 140,207 118,823 29,956 (21,384) EXPENDITURES: Instruction 49,545 62,138 57,777 (12,593) 4,361 Instructional support services 56,653 70,792 56,322 (14,139) 14,470 Board 105 50 50 55 - General administration 2,709 3,195 2,561 (486) 634 School administration 19 26 4 (7) 22 Fiscal services - 88 68 (88) 20 Central services 955 2,378 73 (1,423) 2,305 Student transportation services 398 504 955 (106) (451) Operation of plant 30 40 405 (10) (365) Maintenance of plant 3-32 3 (32) Administrative Technology Services - 79 79 (79) - Community services 20 1,018 751 (998) 267 TOTAL EXPENDITURES 110,437 140,308 119,077 (29,871) 21,231 DEFICIENCY OF REVENUES UNDER EXPENDITURES (186) (101) (254) 85 (153) NET CHANGE IN FUND BALANCE $ (186) $ (101) (254) $ 85 $ (153) FUND BALANCE, JULY 1, 2014 (GAAP BASIS) 186 FUND BALANCE, JUNE 30, 2015 (BUDGETARY BASIS) (68) Adjustment To Conform With GAAP: Elimination of encumbrances 153 FUND BALANCE, JUNE 30, 2015 (GAAP BASIS) $ 85 94

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA FEDERAL ECONOMIC STIMULUS PROGRAMS BUDGETARY COMPARISON SCHEDULE FOR THE YEAR ENDED JUNE 30, 2015 (amounts expressed in thousands) Variances - Actual Positive (Negative) Budgeted Amounts (Budgetary Original Final Original Final Basis) to Final to Actual REVENUES: Federal sources $ 40 $ 218 $ 218 $ 178 $ - TOTAL REVENUES 40 218 218 178 - EXPENDITURES: Instructional support services 40 213 213 (173) - General administration - 5 5 (5) - TOTAL EXPENDITURES 40 218 218 (178) - EXCESS OF REVENUES OVER EXPENDITURES - - - - - NET CHANGE IN FUND BALANCE $ - $ - - $ - $ - FUND BALANCE, JULY 1, 2014 (GAAP BASIS) - FUND BALANCE, JUNE 30, 2015 (BUDGETARY BASIS) - Adjustment To Conform With GAAP: Elimination of encumbrances - FUND BALANCE, JUNE 30, 2015 (GAAP BASIS) $ - 95

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA DEBT SERVICE FUNDS - SBE/COBI BONDS BUDGETARY COMPARISON SCHEDULE FOR THE YEAR ENDED JUNE 30, 2015 (amounts expressed in thousands) Variances - Actual Positive (Negative) Budgeted Amounts (Budgetary Original Final Original Final Basis) to Final to Actual REVENUES State sources: CO & DS withheld for SBE/COBI bonds $ 5,109 $ 5,015 $ 5,015 $ (94) $ - TOTAL REVENUES 5,109 5,015 5,015 (94) - EXPENDITURES: Debt service: Retirement of principal 4,220 4,220 4,220 - - Interest 1,020 907 907 113 - Fiscal charges - 10 10 (10) - TOTAL EXPENDITURES 5,240 5,137 5,137 103 - DEFICIENCY OF REVENUES UNDER EXPENDITURES (131) (122) (122) 9 - OTHER FINANCING SOURCES (USES): Issuance of long-term and refunded debt - 4,275 4,275 4,275 - Net premium from issuance of long-term and refunded debt - 305 305 305 - Payments to refunded debt escrow agent - (4,667) (4,667) (4,667) - TOTAL OTHER FINANCING SOURCES (USES) - (87) (87) (87) - NET CHANGE IN FUND BALANCE $ (131) $ (209) (209) $ (78) $ - FUND BALANCE, JULY 1, 2014 (GAAP BASIS) 535 FUND BALANCE, JUNE 30, 2015 (BUDGETARY BASIS) 326 Adjustments To Conform With GAAP: Elimination of encumbrances - FUND BALANCE, JUNE 30, 2015 (GAAP BASIS) $ 326 96

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA DEBT SERVICE FUNDS - BUSES AND EQUIPMENT BUDGETARY COMPARISON SCHEDULE FOR THE YEAR ENDED JUNE 30, 2015 (amounts expressed in thousands) Variances - Actual Positive (Negative) Budgeted Amounts (Budgetary Original Final Original Final Basis) to Final to Actual REVENUES Local sources: Interest income, local grants and other $ - $ - $ - $ - $ - TOTAL REVENUES - - - - - EXPENDITURES: Debt service: Retirement of Principal 4,170 4,217 4,217 (47) - Interest 147 147 146-1 Fiscal Charges 1 1 1 - - TOTAL EXPENDITURES 4,318 4,365 4,364 (47) 1 DEFICIENCY OF REVENUES UNDER EXPENDITURES (4,318) (4,365) (4,364) 47 1 OTHER FINANCING SOURCES: Transfer from Capital Project Fund 2,881 2,928 2,928 (47) - TOTAL OTHER FINANCING SOURCES 2,881 2,928 2,928 (47) - NET CHANGE IN FUND BALANCE $ (1,437) $ (1,437) (1,436) $ - $ 1 FUND BALANCE, JULY 1, 2014 (GAAP BASIS) 2,872 FUND BALANCE, JUNE 30, 2015 (BUDGETARY BASIS) 1,436 Adjustments To Conform With GAAP: Elimination of encumbrances - FUND BALANCE, JUNE 30, 2015 (GAAP BASIS) $ 1,436 97

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA DEBT SERVICE FUNDS - ARRA QSCB BUDGETARY COMPARISON SCHEDULE FOR THE YEAR ENDED JUNE 30, 2015 (amounts expressed in thousands) Variances - Actual Positive (Negative) Budgeted Amounts (Budgetary Original Final Original Final Basis) to Final to Actual REVENUES Federal sources: Federal grants and entitlements $ 3,259 $ 3,257 $ 3,257 $ (2) $ - TOTAL REVENUES 3,259 3,257 3,257 (2) - EXPENDITURES: Debt service: Interest 3,654 3,654 3,654 - - Fiscal Charges 5 8 8 (3) - TOTAL EXPENDITURES 3,659 3,662 3,662 (3) - DEFICIENCY OF REVENUES UNDER EXPENDITURES (400) (405) (405) (5) - OTHER FINANCING SOURCES: Transfer from Capital Project Fund 469 2,104 2,104 1,635 - TOTAL OTHER FINANCING SOURCES 469 2,104 2,104 1,635 - NET CHANGE IN FUND BALANCE $ 69 $ 1,699 1,699 $ 1,630 $ - FUND BALANCE, JULY 1, 2014 (GAAP BASIS) 128 FUND BALANCE, JUNE 30, 2015 (BUDGETARY BASIS) 1,827 Adjustments To Conform With GAAP: Elimination of encumbrances - FUND BALANCE, JUNE 30, 2015 (GAAP BASIS) $ 1,827 98

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA CAPITAL PROJECTS FUNDS - COBI BONDS BUDGETARY COMPARISON SCHEDULE FOR THE YEAR ENDED JUNE 30, 2015 (amounts expressed in thousands) Variances - Actual Positive (Negative) Budgeted Amounts (Budgetary Original Final Original Final Basis) to Final to Actual REVENUES State sources: CO & DS withheld for SBE/COBI bonds $ - $ - $ - $ - $ - TOTAL REVENUES - - - - - EXPENDITURES: Facilities acquisitions and construction: Remodeling and renovations 1,691 1,691 1,253-438 TOTAL EXPENDITURES 1,691 1,691 1,253-438 DEFICIENCY OF REVENUES UNDER EXPENDITURES (1,691) (1,691) (1,253) - 438 OTHER FINANCING SOURCES: Transfer from Capital Project Fund - - - - - TOTAL OTHER FINANCING SOURCES - - - - - NET CHANGE IN FUND BALANCE $ (1,691) $ (1,691) (1,253) $ - $ 438 FUND BALANCE, JULY 1, 2014 (GAAP BASIS) 1,691 FUND BALANCE, JUNE 30, 2015 (BUDGETARY BASIS) 438 Adjustments To Conform With GAAP: Elimination of encumbrances 35 FUND BALANCE, JUNE 30, 2015 (GAAP BASIS) $ 473 99

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA CAPITAL PROJECTS FUNDS - CO & DS BUDGETARY COMPARISON SCHEDULE FOR THE YEAR ENDED JUNE 30, 2015 (amounts expressed in thousands) Variances - Actual Positive (Negative) Budgeted Amounts (Budgetary Original Final Original Final Basis) to Final to Actual REVENUES State sources: Capital outlay and debt service $ 1,212 $ 2,039 $ 2,039 $ 827 $ - TOTAL REVENUES 1,212 2,039 2,039 827 - EXPENDITURES: Debt service: Fiscal charges - 4 4 (4) - TOTAL EXPENDITURES - 4 4 (4) - EXCESS OF REVENUES OVER EXPENDITURES 1,212 2,035 2,035 823 - OTHER FINANCING USES: Transfer to General Fund (1,269) (2,092) (2,092) (823) - NET CHANGE IN FUND BALANCE $ (57) $ (57) (57) $ - $ - FUND BALANCE, JULY 1, 2014 (GAAP BASIS) 57 FUND BALANCE, JUNE 30, 2015 (BUDGETARY BASIS) - Adjustments To Conform With GAAP: Elimination of encumbrances - FUND BALANCE, JUNE 30, 2015 (GAAP BASIS) $ - 100

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA CAPITAL PROJECTS FUNDS - SALES TAX BUDGETARY COMPARISON SCHEDULE FOR THE YEAR ENDED JUNE 30, 2015 (amounts expressed in thousands) Variances - Actual Positive (Negative) Budgeted Amounts (Budgetary Original Final Original Final Basis) to Final to Actual REVENUES: Local sources: Interest income, local grants and other $ - $ 17 $ 17 $ 17 $ - TOTAL REVENUES - 17 17 17 - EXPENDITURES: Facilities acquisitions and construction: Buildings and fixed equipment 7,395 7,115 2,437 280 4,678 Furniture, fixtures and equipment 935 1,294 1,241 (359) 53 Improvements other than buildings 214 214 214 - - TOTAL EXPENDITURES 8,544 8,623 3,892 (79) 4,731 DEFICIENCY OF REVENUES UNDER EXPENDITURES (8,544) (8,606) (3,875) (62) 4,731 NET CHANGE IN FUND BALANCE $ (8,544) $ (8,606) (3,875) $ (62) $ 4,731 FUND BALANCE, JULY 1, 2014 (GAAP BASIS) 8,606 FUND BALANCE, JUNE 30, 2015 (BUDGETARY BASIS) 4,731 Adjustments To Conform With GAAP: Elimination of encumbrances - FUND BALANCE, JUNE 30, 2015 (GAAP BASIS) $ 4,731 101

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA CAPITAL PROJECTS FUNDS - BUSES AND EQUIPMENT BUDGETARY COMPARISON SCHEDULE FOR THE YEAR ENDED JUNE 30, 2015 (amounts expressed in thousands) Variances - Actual Positive (Negative) Budgeted Amounts (Budgetary Original Final Original Final Basis) to Final to Actual REVENUES Local sources: Interest income and other $ - $ 1 $ 1 $ 1 $ - TOTAL REVENUES - 1 1 1 - EXPENDITURES: Furniture, Fixtures and Equipment 1,210 1,192 1,192 18 - Motor Vehicles (Including Buses) 12,097 12,076 12,076 21 - Fiscal Charges - (7) (7) 7 - TOTAL EXPENDITURES 13,307 13,261 13,261 46 - DEFICIENCY OF REVENUES UNDER EXPENDITURES (13,307) (13,260) (13,260) 47 - OTHER FINANCING USES: Transfer to Debt Service (47) (47) (47) - TOTAL OTHER FINANCING USES - (47) (47) (47) - NET CHANGE IN FUND BALANCE $ (13,307) $ (13,307) (13,307) $ - $ - FUND BALANCE, JULY 1, 2014 (GAAP BASIS) 13,307 FUND BALANCE, JUNE 30, 2015 (BUDGETARY BASIS) - Adjustments To Conform With GAAP: Elimination of encumbrances - FUND BALANCE, JUNE 30, 2015 (GAAP BASIS) $ - 102

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA CAPITAL PROJECTS FUNDS - COPS BUDGETARY COMPARISON SCHEDULE FOR THE YEAR ENDED JUNE 30, 2015 (amounts expressed in thousands) Variances - Actual Positive (Negative) Budgeted Amounts (Budgetary Original Final Original Final Basis) to Final to Actual REVENUES: Local sources: Interest income, local grants and other $ - $ 15 $ 15 $ 15 $ - TOTAL REVENUES - 15 15 15 - EXPENDITURES: Facilities acquisitions and construction: Audio visual materials - 20 20 (20) - Buildings and fixed equipment 42,380 41,587 26,082 793 15,505 Furniture, fixtures and equipment 716 1,504 1,322 (788) 182 TOTAL EXPENDITURES 43,096 43,111 27,424 (15) 15,687 DEFICIENCY OF REVENUES UNDER EXPENDITURES (43,096) (43,096) (27,409) - 15,687 NET CHANGE IN FUND BALANCE $ (43,096) $ (43,096) (27,409) $ - $ 15,687 FUND BALANCE, JULY 1, 2014 (GAAP BASIS) 43,096 FUND BALANCE, JUNE 30, 2015 (BUDGETARY BASIS) 15,687 Adjustments To Conform With GAAP: Elimination of encumbrances 2,147 FUND BALANCE, JUNE 30, 2015 (GAAP BASIS) $ 17,834 103

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA CAPITAL PROJECTS FUNDS - OTHER CAPITAL PROJECTS BUDGETARY COMPARISON SCHEDULE FOR THE YEAR ENDED JUNE 30, 2015 (amounts expressed in thousands) Variances - Actual Positive (Negative) Budgeted Amounts (Budgetary Original Final Original Final Basis) to Final to Actual REVENUES Local source: Impact fees $ 1,000 $ 22,568 $ 22,568 $ 21,568 $ - Interest income and other 150 84 84 (66) - Miscellaneous local sources 847 1,495 1,495 648 - Total local sources 1,997 24,147 24,147 22,150 - State sources: State grants and entitlements 5,470 4,777 4,777 (693) - Total state sources 5,470 4,777 4,777 (693) - TOTAL REVENUES 7,467 28,924 28,924 21,457 - EXPENDITURES: Facilities acquisitions and construction: Audiovisual Materials - 10 10 (10) - Buildings and fixed equipment 22,842 29,965 2,611 (7,123) 27,354 Furniture, fixtures and equipment 408 473 123 (65) 350 Motor Vehicles 162 485 28 (323) 457 Land 1,752 1,822 1,121 (70) 701 Improvements other than buildings 188 1,802 1,400 (1,614) 402 Remodeling and renovations 161 3,805 783 (3,644) 3,022 TOTAL EXPENDITURES 25,513 38,362 6,076 (12,849) 32,286 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (18,046) (9,438) 22,848 8,608 32,286 OTHER FINANCING SOURCES (USES): Transfers from General fund 7 125 125 118 - Transfers to General fund (26,506) (22,374) (22,374) 4,132 - TOTAL OTHER FINANCING USES (26,499) (22,249) (22,249) 4,250 - NET CHANGE IN FUND BALANCE $ (44,545) $ (31,687) 599 $ 12,858 $ 32,286 FUND BALANCE, JULY 1, 2014 (GAAP BASIS) 36,092 FUND BALANCE, JUNE 30, 2015 (BUDGETARY BASIS) 36,691 Adjustments To Conform With GAAP: Elimination of encumbrances 1,409 FUND BALANCE, JUNE 30, 2015 (GAAP BASIS) $ 38,100 104

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUND FOR THE YEAR ENDED JUNE 30, 2015 (amounts expressed in thousands) SCHOOL INTERNAL FUNDS JUNE 30, 2014 ADDITIONS DELETIONS JUNE 30, 2015 ASSETS Cash, cash equivalents and investments $ 16,663 $ 77,877 $ 76,840 $ 17,700 Accounts receivable 1,071 1,178 1,071 1,178 TOTAL ASSETS $ 17,734 $ 79,055 $ 77,911 $ 18,878 LIABILITIES Accounts payable $ 501 $ 489 $ 501 $ 489 Due to student organizations 17,233 78,566 77,410 18,389 TOTAL LIABILITIES $ 17,734 $ 79,055 $ 77,911 $ 18,878 105

OTHER SUPPLEMENTARY INFORMATION

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA LONG-TERM LIABILITIES SCHEDULE OF DEBT SERVICE REQUIREMENTS TO MATURITY - BONDS AND LEASE PAYABLE AND OBLIGATIONS UNDER LEASE PURCHASE AGREEMENTS (UNAUDITED) JUNE 30, 2015 (amounts expressed in thousands) STATE BOARD OF EDUCATION CAPITAL OBLIGATIONS UNDER LEASE PURCHASE AGREEMENTS YEAR OUTLAY BOND ISSUES CERTIFICATES OF PARTICIPATION ENDED JUNE 30 PRINCIPAL INTEREST PRINCIPAL INTEREST 2016 $ 3,717 $ 813 $ 53,495 $ 67,225 2017 2,317 610 75,205 70,030 2018 1,543 494 76,850 67,286 2019 1,311 417 78,600 64,152 2020 1,177 358 95,338 61,027 2021-2025 4,590 1,007 507,970 251,743 2026-2030 2,775 331 542,190 118,290 2031-2033 - - 170,745 11,260 Total $ 17,430 $ 4,030 $ 1,600,393 $ 711,013 108

TOTAL TOTAL PRINCIPAL AND PRINCIPAL INTEREST INTEREST $ 57,212 $ 68,038 $ 125,250 77,522 70,640 148,162 78,393 67,780 146,173 79,911 64,569 144,480 96,515 61,385 157,900 512,560 252,750 765,310 544,965 118,621 663,586 170,745 11,260 182,005 $ 1,617,823 $ 715,043 $ 2,332,866 109

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA LONG-TERM LIABILITIES SCHEDULE OF BONDS AND LEASE PAYABLE AND OBLIGATIONS UNDER LEASE PURCHASE AGREEMENTS (UNAUDITED) JUNE 30, 2015 (amounts expressed in thousands) INTEREST RATES FINAL DATE AMOUNT FOR DEBT MATURITY DESCRIPTION OF ISSUE ISSUED OUTSTANDING DATE STATE BOARD OF EDUCATION CAPITAL OUTLAY BOND ISSUES (COBI): COBI 2005-A (1) 05/01/2005 $ 21,200-01/01/2017 COBI 2005-B (1) 07/01/2005 2,675-01/01/2020 COBI 2009-A 09/10/2009 1,655 5.00% 01/01/2019 COBI 2010-A 10/14/2010 9,700 3.50% to 5.00% 01/01/2030 COBI 2010-A 10/14/2010 1,790 4.00% to 5.00% 01/01/2022 COBI 2011-A 12/07/2011 5,820 3.00% to 5.00% 01/01/2023 COBI 2014-B (1) 12/02/2014 4,275 2.00% to 5.00% 01/01/2020 TOTAL COBI $ 47,115 (1) COBI 2014-B refunded COBI 2005-A and COBI 2005-B OBLIGATIONS UNDER LEASE PURCHASE AGREEMENTS: Certificates of participation Series 2002 qualified zone academy bonds 06/11/2002 950-06/11/2016 Certificates of participation Series 2002E 09/01/2002 93,350 4.00% to 5.38% 08/01/2016 Certificates of participation Series 2003A 06/26/2003 60,865 3.4% to 5.00% 08/01/2015 Certificates of participation Series 2003B 01/00/1900 124,295 0.72% ** 08/01/2029 Certificates of participation Series 2004A 05/04/2004 103,575 5.00% 08/01/2015 Certificates of participation Series 2004 qualified zone academy bonds 04/30/2004 2,923-04/30/2020 Certificates of participation Series 2005A 03/22/2005 124,630-08/01/2022 Certificates of participation Series 2005 qualified zone academy bonds 12/15/2005 2,150-12/15/2020 Certificates of participation Series 2006A 05/25/2006 222,015 4.25% to 5.00% 08/01/2016 Certificates of participation Series 2007A 02/28/2007 268,545 4.00% to 5.50% 08/01/2017 Certificates of participation Series 2007C 03/22/2007 192,310 4.00% to 5.00% 08/01/2027 Certificates of participation Series 2007D 05/03/2007 30,485 5.00% 08/01/2015 Certificates of participation Series 2007E 10/31/2007 147,390 3.90% to 5.00% 08/01/2017 Certificates of participation Series 2010A QSCB 11/15/2010 67,665 5.40% *** 08/01/2025 Certificates of participation Series 2011B 06/29/2011 166,270 1.90% 08/01/2015 Certificates of participation Series 2011A 07/13/2011 112,425 4.125% to 5.00% 08/01/2032 Certificates of participation Series 2011C 11/15/2011 15,355 1.74% 08/01/2018 Certificates of participation Series 2011D 11/15/2011 25,065 2.64% 08/01/2021 Certificates of participation Series 2012A 05/15/2012 20,085 5.00% 08/01/2028 Certificates of participation Series 2012B 06/29/2012 116,555 0.56% **** 08/01/2028 Certificates of participation Series 2012C 08/09/2012 67,145 4.00% to 5.00% 08/01/2029 Certificates of participation Series 2014A 01/31/2014 115,560 0.1841% * 08/01/2027 Certificates of participation Series 2014B 06/27/2014 166,010 3.00% to 5.00% 08/01/2025 Certificates of participation Series 2014C 07/29/2014 33,280 5.00% 08/01/2031 Certificates of participation Series 2015A 05/05/2015 106,315 2.52% 08/01/2022 Certificates of participation Series 2015B 01/14/2015 145,535 5.00% 08/01/2031 Certificates of participation Series 2015D 04/30/2015 221,640 5.00% 08/01/2032 TOTAL OBLIGATIONS UNDER LEASE PURCHASE AGREEMENTS $ 2,752,388 * 2014A - Variable rate paid to certificate holders SIFMA +46 BPS. Resets weekly, 0.1841% at 6/30/2015 ** 2003B - Variable rate paid to certificate holders SIFMA + 65 basis points. Resets weekly, 0.72% at 6/30/2015 *** 2010A QSCB - Average coupon rate before IRS subsidy is 5.4%. Net interest rate with IRS subsidy is.5837% **** 2012B - Variable rate paid to certificate holders SIFMA +49 BPS. Resets weekly, 0.56% at 6/30/2015 110

DEBT DEBT DEBT DEBT REFUNDED/ DEBT OUTSTANDING ISSUED MATURED DEFEASED OUTSTANDING JUNE 30, 2014 FY 14-15 FY 14-15 FY 14-15 JUNE 30, 2015 $ 6,000 $ - $ 2,640 $ 3,360 $ - 1,430-280 1,150-915 - 160-755 8,000-425 - 7,575 1,550-140 - 1,410 3,990 575-3,415-4,275 - - 4,275 $ 21,885 $ 4,275 $ 4,220 $ 4,510 $ 17,430 $ 950 $ - $ - $ - $ 950 26,425-11,665-14,760 7,250-3,570-3,680 124,295 - - - 124,295 6,830-3,335-3,495 2,923 - - - 2,923 123,080-220 122,860-2,150 - - - 2,150 181,025-6,585 160,405 14,035 205,360-12,205 152,885 40,270 184,585-5,325-179,260 9,760-4,760-5,000 134,675-4,585 115,065 15,025 67,665 - - - 67,665 1,680-835 - 845 112,425 - - - 112,425 14,865-8,325-6,540 24,525-330 - 24,195 20,085 - - - 20,085 111,955-4,645-107,310 67,145 - - - 67,145 115,560 - - - 115,560 166,010 - - - 166,010-33,280 - - 33,280-106,315 - - 106,315-145,535 - - 145,535-221,640 - - 221,640 $ 1,711,223 $ 506,770 $ 66,385 $ 551,215 $ 1,600,393 111

STATISTICAL SECTION This part of The School District of Palm Beach County s comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures and required supplemental information says about the district s overall financial position. CONTENTS Financial Trends These schedules contain trend information to assist the reader in understanding how the District s financial position has changed over time. Revenue Capacity These schedules contain information to assist the reader in assessing the District s major revenue sources. Debt Capacity These schedules present information to assist the reader in assessing the affordability of the District s current levels of outstanding debt and the District s ability to issue additional debt in the future. Demographic and Economic Information These schedules offer demographic and economic indicators to assist the reader in understanding the environment within which the District s financial activities take place. Operating Information These schedules contain service and infrastructure data to assist the reader in understanding how the information in the District s financial report relates to the service the District provides and the activities it performs. Sources: Unless otherwise noted, the information in these schedules is derived from comprehensive annual financial reports for the relevant year.

THE INFORMATION CONTAINED IN THIS STATISTICAL SECTION HAS BEEN OBTAINED FROM PUBLIC DOCUMENTS, RECORDS AND OTHER SOURCES CONSIDERED TO BE RELIABLE AND, WHILE NOT GUARANTEED AS TO COMPLETENESS OR ACCURACY, MANAGEMENT BELIEVES IT TO BE CORRECT.

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA NET POSITION BY COMPONENT LAST TEN FISCAL YEARS (UNAUDITED) (amounts expressed in thousands) 2006 2007 2008 2009 * Net Position components Primary Government Net Investment in capital assets $ 1,412,258 $ 1,602,902 $ 1,771,226 $ 1,752,405 Restricted 317,225 270,587 316,216 362,395 Unrestricted (deficit) (119,420) (82,395) (73,095) (89,132) Total primary government net position $ 1,610,063 $ 1,791,094 $ 2,014,347 $ 2,025,668 Source: The School District of Palm Beach County - Accounting Services * Restated - Adoption of GASB 53 ** Restated - Adoption of GASB 65 *** Restated - Adoption of GASB 68 116

TABLE 1 2010 2011 2012 2013** 2014*** 2015 $ 1,851,072 $ 1,840,467 $ 1,825,814 $ 1,794,798 $ 1,781,012 $ 1,816,220 378,402 390,082 334,924 301,111 257,756 207,159 (125,200) (65,830) (75,034) (100,978) (775,703) (742,933) $ 2,104,274 $ 2,164,719 $ 2,085,704 $ 1,994,931 $ 1,263,065 $ 1,280,446 117

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA EXPENSES, PROGRAM REVENUES AND NET (EXPENSE)/REVENUE LAST TEN FISCAL YEARS (UNAUDITED) (amounts expressed in thousands) 2006 2007 2008 2009 * Primary Government Expenses Instruction $ 854,689 $ 909,826 $ 941,728 $ 954,271 Instructional support services 158,704 160,586 169,566 170,854 Board 5,309 4,735 8,238 5,293 General administration 9,400 9,013 10,142 10,161 School administration 90,685 97,408 98,867 98,528 Facilities acquisition and construction 85,528 127,948 91,566 92,500 Fiscal services 4,264 5,385 6,169 6,141 Food services 57,339 57,888 60,023 60,858 Central services 12,675 14,617 15,622 14,520 Pupil transportation services 45,420 47,590 54,455 46,217 Operation of plant 123,876 133,150 131,621 131,285 Maintenance of plant 43,678 43,155 46,726 47,184 Administrative technology services 5,228 6,047 5,520 5,588 Community services 25,328 26,875 31,084 30,125 Interest on long-term debt 76,875 88,024 100,220 99,581 Unallocated depreciation expense 81,467 90,216 101,452 107,044 Amortization expense 1,459 2,970 2,014 1,136 Total Expenses 1,681,924 1,825,433 1,875,013 1,881,286 Program Revenues Governmental activities Charges for services Instruction 1,477 1,404 1,454 1,724 Food 23,449 25,515 25,285 23,015 Pupil transportation 1,619 1,669 2,382 2,233 Community 19,385 19,996 21,495 21,538 Operating grants and contributions 171,829 207,287 241,848 250,964 Capital grants and contributions 49,026 52,020 71,973 44,383 Total Program Revenues 266,785 307,891 364,437 343,857 Net (Expense)/Revenue $ (1,415,139) $ (1,517,542) $ (1,510,576) $ (1,537,429) * Restated Source: The School District of Palm Beach County - Accounting Services 118

TABLE 2 2010 2011 2012 2013 2014 2015 $ 918,127 $ 934,817 $ 910,896 $ 949,936 $ 1,047,726 $ 1,030,417 187,977 180,478 157,679 161,937 174,848 168,660 5,634 4,776 4,806 5,495 6,149 6,606 13,061 10,868 9,108 9,887 9,231 9,033 95,817 96,845 89,247 92,887 96,911 94,125 44,039 27,544 31,494 29,525 26,343 20,846 6,285 6,056 4,999 5,726 5,881 5,677 62,997 64,757 66,675 70,710 74,047 77,063 14,793 14,553 12,771 13,550 15,715 14,928 44,954 44,092 48,105 46,955 47,036 45,795 133,055 133,559 123,043 123,343 124,757 123,559 62,677 62,422 63,250 63,694 67,135 68,083 10,450 9,607 8,096 7,260 6,114 7,022 28,626 30,262 30,861 33,897 36,157 36,537 83,404 86,464 81,386 84,780 80,122 47,229 110,820 113,902 109,871 109,590 108,894 108,480 1,552 3,244 2,716 1,596 562 1,173 1,824,268 1,824,246 1,755,003 1,810,768 1,927,628 1,865,233 1,958 2,104 2,591 2,783 2,684 2,359 20,437 18,482 16,814 15,024 14,429 13,506 2,269 2,381 3,512 2,576 931 885 22,705 24,325 24,349 25,858 29,945 31,156 266,066 565,764 461,369 471,831 476,357 480,756 15,122 26,711 12,401 14,568 14,357 15,585 328,557 639,767 521,036 532,640 538,703 544,247 $ (1,495,711) $ (1,184,479) $ (1,233,967) $ (1,278,128) $ (1,388,925) $ (1,320,986) 119

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA GENERAL REVENUES AND TOTAL CHANGES IN NET POSITION LAST TEN FISCAL YEARS (UNAUDITED) (amounts expressed in thousands) 2006 2007 2008 2009 * Primary Government Net (Expense)/Revenue $ (1,415,139) $ (1,517,542) $ (1,510,576) $ (1,537,429) General Revenue and other Changes in Net Position Taxes Property taxes, levied for general purposes $ 739,700 $ 885,000 $ 879,809 $ 887,265 Property taxes, levied for debt service 27,862 24,796 67 - Property taxes, levied for capital projects 251,074 309,793 328,401 282,362 Local sales taxes 120,466 116,693 110,475 100,100 Grants and entitlements not restricted to specific purposes 410,636 279,180 312,001 241,445 Investment earnings 39,849 60,661 63,069 9,903 Miscellaneous 48,396 22,450 40,007 27,675 Transfers - - - - Total General Revenue and Transfers $ 1,637,983 $ 1,698,573 $ 1,733,829 $ 1,548,750 Change in Net Position $ 222,844 $ 181,031 $ 223,253 $ 11,321 * Restated Source: The School District of Palm Beach County - Accounting Services 120

TABLE 3 2010 2011 2012 2013 2014 2015 $ (1,495,711) $ (1,184,479) $ (1,233,967) $ (1,278,128) $ (1,388,925) $ (1,320,986) $ 873,359 $ 859,190 $ 846,738 $ 802,052 $ 809,909 $ 878,769 - - - - - - 263,239 205,657 200,551 199,078 202,891 216,293 99,284 50,632 - - - - 279,840 77,277 55,613 144,821 221,228 197,265 23,066 9,439 4,195 1,155 2,348 2,299 35,529 42,729 41,142 53,006 56,186 43,741 - - 6,713-13,000 - $ 1,574,317 $ 1,244,924 $ 1,154,952 $ 1,200,112 $ 1,305,562 $ 1,338,367 $ 78,606 $ 60,445 $ (79,015) $ (78,016) $ (83,363) $ 17,381 121

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA FUND BALANCES, GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (UNAUDITED) (modified accrual basis of accounting) (amounts expressed in thousands) 2006 2007 2008 2009 General Fund Reserved $ 24,716 $ 18,758 $ 17,713 $ 9,715 Unreserved 72,089 82,817 103,007 82,697 Total general fund $ 96,805 $ 101,575 $ 120,720 $ 92,412 All Other Governments Funds Reserved $ 359,242 $ 378,742 $ 414,658 $ 300,934 Unreserved, reported in: Special revenue funds 14,006 15,207 15,952 (398) Capital projects funds 182,976 377,986 254,135 233,858 Total all other governmental funds $ 556,224 $ 771,935 $ 684,745 $ 534,394 General Fund Nonspendable $ 10,917 $ 6,039 Restricted 13,100 12,050 Assigned 57,303 34,923 Unassigned 39,400 39,400 Total General Fund $ 120,720 $ 92,412 All Other Governments Funds Nonspendable $ 817 $ 1,777 Restricted 641,209 498,580 Committed - - Assigned - Capital Projects Funds 42,719 34,037 Total all other governmental funds $ 684,745 $ 534,394 Source: The School District of Palm Beach County - Accounting Services 122

TABLE 4 2010 2011 2012 2013 2014 2015 $ $ 19,096 77,936 97,032 $ 192,909 $ (297) 278,145 470,757 $ 14,814 $ 12,498 $ 5,658 $ 11,312 $ 9,619 $ 9,016 13,193 17,098 23,335 27,816 28,170 28,105 24,656 102,702 86,561 49,746 27,524 30,011 44,369 54,640 51,113 44,400 46,500 50,000 $ 97,032 $ 186,938 $ 166,667 $ 133,274 $ 111,813 $ 117,132 $ 1,438 $ 2,883 $ 2,867 $ 2,872 $ 2,684 $ 3,200 440,688 465,534 384,995 287,751 237,578 168,124 1,750 1,549 1,290 1,115 186 85 26,881 43,051 48,756 61,178 35,490 38,006 $ 470,757 $ 513,017 $ 437,908 $ 352,916 $ 275,938 $ 209,415 123

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA GOVERNMENTAL FUNDS REVENUE LAST TEN FISCAL YEARS (UNAUDITED) (amounts expressed in thousands) 2006 2007 2008 2009 REVENUES: Local sources: Ad valorem taxes $ 1,018,633 $ 1,219,589 $ 1,208,277 $ 1,169,627 Sales tax 120,466 116,693 110,475 100,100 Impact fees 28,063 18,517 7,721 3,254 Interest income and other 39,752 60,213 63,033 26,612 School age child care fees 18,763 19,923 21,504 21,538 Food service sales 23,056 25,146 24,926 23,015 Local grants and other 31,886 33,267 41,707 41,829 Total local sources 1,280,619 1,493,348 1,477,643 1,385,975 State sources: Florida education finance program 206,887 117,002 136,744 61,735 Capital outlay and debt service 7,110 6,868 6,755 6,697 Food service 869 853 911 937 Transportation 27,128 29,895 26,967 27,280 Public education capital outlay 12,608 8,526 26,195 16,697 Effort index 491 403 - - Classrooms first program - - - - Class size reduction 127,108 150,765 207,066 199,085 State grants and entitlements 69,804 67,129 69,732 59,858 Total state sources 452,005 381,441 474,370 372,289 Federal sources: Federal grants and entitlements 113,614 104,314 107,338 126,437 National school lunch act 32,311 31,451 33,744 37,995 Total federal sources 145,925 135,765 141,082 164,432 TOTAL REVENUES $ 1,878,549 $ 2,010,554 $ 2,093,095 $ 1,922,696 124

TABLE 5 2010 2011 2012 2013 2014 2015 $ 1,136,598 $ 1,064,847 $ 1,047,289 $ 1,001,130 $ 1,012,800 $ 1,095,062 99,284 50,632 - - - - 1,203 6,003-12,808-22,568 5,683 10,177 3,712 1,146 2,405 2,149 22,705 24,325 24,349 25,858 29,945 31,156 20,437 18,482 16,814 15,024 14,429 13,506 39,181 35,419 41,475 43,334 38,464 43,710 1,325,091 1,209,885 1,133,639 1,099,300 1,098,043 1,208,151 62,127 123,995 99,433 187,320 266,681 242,366 6,696 6,777 6,856 6,900 6,939 7,165 926 928 952 948 1,000 1,015 1,964 - - - - - - 5,453 - - - - - - - - - - - - - - - - 203,072 196,255 202,704 206,594 207,018 209,873 31,710 34,903 33,082 36,984 39,352 43,149 306,495 368,311 343,027 438,746 520,990 503,568 210,706 254,723 135,373 128,546 129,305 125,937 43,029 47,552 51,279 56,431 61,818 65,453 253,735 302,275 186,652 184,977 191,123 191,390 $ 1,885,321 $ 1,880,471 $ 1,663,318 $ 1,723,023 $ 1,810,156 $ 1,903,109 125

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (UNAUDITED) (amounts expressed in thousands) 2006 2007 2008 2009 Expenditures Current: Instruction $ 849,024 $ 908,980 $ 932,482 $ 936,120 Instructional support services 158,067 159,765 167,559 167,864 Board 4,809 4,976 8,130 5,169 General administration 9,660 8,841 10,044 9,930 School administration 92,376 94,815 97,181 96,097 Facilities acquisition and construction 742 494 526 808 Fiscal services 4,469 4,877 5,875 5,828 Food services 57,064 57,626 60,087 60,613 Central services 13,828 14,516 15,270 14,311 Pupil transportation services 45,201 46,178 53,478 45,583 Operation of plant 122,911 132,164 134,986 128,868 Maintenance of plant 43,261 42,689 50,423 46,190 Administrative technology services 5,216 5,156 5,513 5,451 Community services 24,385 27,878 30,676 29,713 Total Current Expenditures 1,431,013 1,508,955 1,572,230 1,552,545 Capital outlay 515,355 508,950 574,600 395,329 Debt service: Retirement of principal 58,861 67,915 75,785 58,705 Interest 75,982 84,353 97,948 101,587 Fiscal charges 4,937 8,023 3,482 1,359 TOTAL EXPENDITURES 2,086,148 2,178,196 2,324,045 2,109,525 EXCESS (DEFICIENCY) OF REVENUES OVER (UNDER) EXPENDITURES (207,599) (167,642) (230,950) (186,829) OTHER FINANCING SOURCES (USES): Transfers in 145,425 145,425 211,533 216,104 Transfers out (145,425) (145,425) (211,533) (216,104) Proceeds of long-term and refunded debt 240,451 240,451 147,390 - Issuance of long-term and refunded debt Net premium (discount) from issuance of long-term and refunded debt 6,376 6,376 7,946 - Payments to refunded debt escrow agent (77,204) (77,204) (3,175) - Proceeds of loss recoveries 24,096 24,096 10,400 4,869 Sale of capital assets and other 2,055 2,055 344 3,301 TOTAL OTHER FINANCING SOURCES (USES) 195,774 195,774 162,905 8,170 NET CHANGE IN FUND BALANCES $ (11,825) $ 28,132 $ (68,045) $ (178,659) 126

TABLE 6 2010 2011 2012 2013 2014 2015 $ 910,600 $ 926,516 $ 924,120 $ 964,140 $ 1,047,481 $ 1,058,183 185,569 179,969 160,739 163,653 174,998 172,288 5,579 4,694 4,784 5,467 6,044 6,828 13,186 11,323 8,750 9,759 9,138 8,998 94,163 96,042 90,618 93,665 96,411 96,772 999 1,245 1,062 490 27,181 21,667 6,234 5,918 5,289 5,576 5,817 5,893 63,172 64,540 66,740 70,572 73,944 76,781 14,709 14,660 12,841 13,721 15,408 15,434 44,454 43,940 48,438 47,810 46,976 47,270 131,965 133,576 124,413 124,654 124,939 126,187 60,702 62,787 59,048 64,252 67,402 69,683 9,533 9,697 8,239 7,446 6,238 7,085 28,078 30,004 31,041 34,239 36,179 37,171 1,568,943 1,584,911 1,546,122 1,605,444 1,738,156 1,750,240 226,576 90,665 68,597 93,891 45,102 48,401 61,185 64,035 61,405 60,815 68,350 74,822 91,971 88,315 84,721 84,890 116,489 73,506 546 4,139 2,060 699 1,510 1,956 1,949,221 1,832,065 1,762,905 1,845,739 1,969,607 1,948,925 (63,900) 48,406 (99,587) (122,716) (159,451) (45,816) 277,655 249,817 232,831 237,637 250,043 237,858 (277,655) (249,817) (226,118) (237,637) (237,043) (237,858) 1,655 245,425 295,305 67,145 14,002-281,570 511,045 166 1,159 10,539 10,990 25,748 67,974 (1,806) (172,184) (311,780) (77,969) (278,468) (599,420) 4,501 3,900 3,429 4,109 5,057 117 367 5,460 1 56 103 4,896 4,883 83,760 4,207 4,331 61,012 (15,388) $ (59,017) $ 132,166 $ (95,380) $ (118,385) $ (98,439) $ (61,204) 127

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA TABLE 7 RATIO OF DEBT SERVICE TO NON-CAPITAL EXPENDITURES LAST TEN FISCAL YEARS (UNAUDITED) FISCAL DEBT Total Capitalized Non-Capital YEAR SERVICE Expenditures Capital Outlay (1) Expenditures Ratio 2006 $ 134,843 $ 2,086,148 $ 433,980 $ 1,652,168 8.16% 2007 152,268 2,178,196 393,778 1,784,418 8.53% 2008 173,733 2,324,045 484,053 1,839,992 9.44% 2009 160,292 2,109,525 303,205 1,806,320 8.87% 2010 153,156 1,949,221 180,133 1,769,088 8.66% 2011 152,350 1,832,065 63,401 1,768,664 8.61% 2012 146,126 1,762,905 38,336 1,724,569 8.47% 2013 145,705 1,845,739 64,706 1,781,033 8.18% 2014 184,839 1,969,607 46,026 1,923,581 9.61% 2015 148,328 1,948,925 49,181 1,899,744 7.81% (1) Capitalized capital outlay from reconciliation of changes in fund balance to the statement of activities Source: The School District of Palm Beach County - Accounting Services 128

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA TABLE 8 ASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY LAST TEN TAX YEARS (UNAUDITED) (amounts expressed in thousands) ACTUAL VALUE REAL PROPERTY NET TAXABLE DIRECT FISCAL PERSONAL TOTAL ASSESSED ASSESSED TAX YEAR RESIDENTIAL COMMERCIAL OTHER 1 PROPERTY JUST VALUE VALUE EXEMPTIONS VALUATION % 2 RATE 2006 $ 141,838,576 $ 15,432,972 $ 15,796,864 $ 7,477,803 $ 180,546,215 $ 148,876,692 $ 18,613,949 $ 130,262,743 72.15 8.106 2007 186,122,863 19,818,634 19,068,434 7,862,551 232,872,482 182,194,149 20,941,956 161,252,193 69.24 7.872 2008 186,691,396 20,990,540 20,643,332 8,023,846 236,349,114 191,826,739 21,597,603 170,229,136 72.02 7.356 2009 171,730,204 21,856,923 21,597,448 8,243,267 223,427,842 191,249,945 23,012,043 168,237,902 75.30 7.251 2010 138,686,709 20,363,548 22,341,265 8,403,311 189,794,833 171,643,979 23,524,066 148,119,913 78.04 7.983 2011 119,853,487 17,121,091 20,063,200 9,341,651 166,379,429 155,555,378 21,085,703 134,469,675 80.82 8.154 2012 118,927,021 16,264,373 19,508,984 8,584,234 163,284,612 152,332,012 20,283,306 132,048,706 80.87 8.180 2013 118,105,507 16,251,322 19,388,620 9,266,245 163,011,694 152,792,949 20,073,920 132,719,029 81.42 7.778 2014 124,767,998 16,967,663 20,484,908 9,444,021 171,664,590 157,928,325 19,617,996 138,310,329 80.57 7.586 2015 141,967,866 18,991,599 22,176,433 9,684,443 192,820,341 167,934,009 18,199,480 149,734,529 77.65 7.594 Source: Palm Beach County CAFR Palm Beach County Tax Collector's Office 1 Includes Industrial, Railroad and Telegraph, and Other Property 2 Assessed Value As A Percent Of Taxable Value 129

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS (UNAUDITED) (amounts expressed in thousands) NET TAXABLE DISCOUNTS CURRENT FISCAL ASSESSED BASE PROPERTY FOR EARLY TAX YEAR VALUATION MILLAGE TAXES LEVIED PAYMENT COLLECTIONS 2006 $ 130,262,743 8.1060 $ 1,055,910 $ 25,051 $ 989,542 2007 161,252,193 7.8720 1,269,377 27,947 1,194,029 2008 170,229,136 7.3560 1,252,206 27,124 1,205,983 2009 168,237,902 7.2510 1,219,893 27,513 1,166,218 2010 148,119,913 7.9830 1,182,441 27,584 1,129,014 2011 134,469,675 8.1540 1,096,466 26,124 1,050,949 2012 132,048,706 8.1800 1,080,158 25,998 1,037,782 2013 132,719,029 7.7780 1,032,289 21,689 991,951 2014 138,310,329 7.5860 1,049,222 22,683 1,009,053 2015 149,734,529 7.5940 1,137,084 24,358 1,094,037 Source: The School District of Palm Beach County - Accounting Services Palm Beach County Tax Collector's Office. 130

TABLE 9 % OF CURRENT % OF TOTAL % OF CURRENT TAX COLLECTED % OF TOTAL TAX COLLECTED PRIOR YEAR TAX COLLECTED PLUS DISCOUNT TAX COLLECTED PLUS DISCOUNTS TAX TOTAL TAX TO PROPERTY TO PROPERTY TO PROPERTY TO PROPERTY COLLECTIONS COLLECTIONS TAXES LEVIED TAXES LEVIED TAXES LEVIED TAXES LEVIED $ 548 $ 990,090 93.71 96.09 93.77 96.14 746 1,194,775 94.06 96.27 94.12 96.32 2,294 1,208,277 96.31 98.47 96.49 98.66 3,409 1,169,627 95.60 97.86 95.88 98.13 7,584 1,136,598 95.48 97.81 96.12 98.46 13,899 1,064,848 95.85 98.23 97.12 99.50 9,507 1,047,289 96.08 98.48 96.96 99.36 9,179 1,001,130 96.09 98.19 96.98 99.08 3,747 1,012,800 96.17 98.33 96.53 98.69 1,025 1,095,063 96.21 98.36 96.30 98.45 131

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA PROPERTY TAX RATES PER THOUSAND OF ASSESSED VALUATION ALL COUNTYWIDE DIRECT AND OVERLAPPING GOVERNMENTS LAST TEN TAX YEARS (UNAUDITED) DIRECT PALM BEACH COUNTY FISCAL GENERAL CAPITAL DEBT GENERAL DEBT YEAR FUND PROJECTS SERVICE TOTAL FUND SERVICE 2006 5.8840 2.0000 0.2220 8.1060 4.4500 0.2692 2007 5.7120 2.0000 0.1600 7.8720 4.2800 0.1975 2008 5.3560 2.0000 0.0000 7.3560 3.7811 0.2002 2009 5.5010 1.7500 0.0000 7.2510 3.7811 0.1845 2010 6.1350 1.8480 0.0000 7.9830 4.3440 0.2174 2011 6.5840 1.5700 0.0000 8.1540 4.7500 0.2460 2012 6.6200 1.5600 0.0000 8.1800 4.7815 0.2110 2013 6.2320 1.5460 0.0000 7.7780 4.7815 0.2087 2014 6.0650 1.5210 0.0000 7.5860 4.7815 0.2087 2015 6.0120 1.5000 0.0000 7.5120 4.7815 0.1462 (1) Source: The School District of Palm Beach County - Accounting Services Palm Beach County Tax Collector's Office. 132

TABLE 10 OVERLAPPING SOUTH HEALTH EVER- FLORIDA CHILD CARE GLADES WATER MGT. TOTAL FIND SERVICES DISTRICT CONST. TOTAL DISTRICT COUNTYWIDE 0.0385 0.6887 1.0800 0.1000 6.6264 0.5970 15.3294 0.0385 0.6199 0.9700 0.1000 6.2059 0.5970 14.6749 0.0345 0.5823 0.8900 0.0894 5.5775 0.5346 13.4681 0.0345 0.6009 0.9975 0.0894 5.6879 0.5346 13.4735 0.0345 0.6898 1.1451 0.0894 6.5202 0.5346 15.0378 0.0345 0.7513 1.1451 0.0894 7.0163 0.5346 15.7049 0.0345 0.7475 1.1250 0.0624 6.9619 0.3739 15.5158 0.0345 0.7300 1.1220 0.0613 6.9380 0.3676 15.0836 0.0345 0.7300 1.1220 0.0613 6.9380 0.3676 14.8916 0.0320 0.6677 1.0426 0.0506 6.7206 0.3045 14.5371 133

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA PROPERTY TAX LEVIES ALL COUNTYWIDE DIRECT AND OVERLAPPING GOVERNMENTS LAST TEN FISCAL YEARS (UNAUDITED) (amounts expressed in thousands) PALM BEACH COUNTY SCHOOL DISTRICT FISCAL GENERAL CAPITAL DEBT YEAR FUND PROJECTS SERVICE TOTAL 2006 $ 766,466 $ 260,525 $ 28,918 $ 1,055,910 2007 921,073 322,504 25,800 1,269,377 2008 911,747 340,458-1,252,206 2009 925,477 294,416-1,219,893 2010 908,716 273,726-1,182,441 2011 885,348 211,117-1,096,466 2012 874,162 205,996-1,080,158 2013 827,105 205,184-1,032,289 2014 838,852 210,370-1,049,222 2015 900,204 224,602-1,124,806 (1) Source: Palm Beach County Tax Collector's Office. 134

TABLE 11 PALM BEACH COUNTY (1) HEALTH SOUTH FLORIDA GENERAL DEBT CHILD CARE WATER MGT. TOTAL FUND SERVICE F.I.N.D. SERVICES DISTRICT TOTAL DISTRICT COUNTYWIDE $ 580,768 $ 35,133 $ 5,038 $ 90,113 $ 141,312 $ 852,364 $ 91,199 $ 1,999,473 690,141 32,520 6,228 100,275 156,908 986,072 112,647 2,368,096 644,974 34,160 5,899 99,558 152,166 936,757 106,687 2,295,650 608,386 29,670 5,565 96,921 160,891 901,432 100,648 2,221,973 615,785 30,852 4,906 98,094 162,841 912,478 88,737 2,183,657 524,277 27,152 4,192 90,850 138,571 785,041 75,638 1,957,145 821,068 36,232 4,316 93,508 140,731 1,095,854 52,571 2,228,584 599,590 26,171 4,339 91,802 141,098 862,999 53,937 1,949,224 622,195 27,157 4,506 91,756 141,063 886,678 53,683 1,989,583 673,232 20,585 4,825 94,332 151,043 944,018 53,732 2,122,556 135

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA TABLE 12 RATIO OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS (UNAUDITED) (amounts expressed in thousands) GOVERNMENTAL ACTIVITIES STATE BOARD GENERAL CERTIFICATES TOTAL PERCENTAGE FISCAL OF EDUCATION LOAN OBLIGATION OF PRIMARY OF PERSONAL PER YEAR BONDS PAYABLE BONDS PARTICIPATION GOVERNMENT INCOME (1) CAPITA (1) 2006 $ 42,523 $ - $ 55,274 $ 1,592,016 $ 1,689,813 2.38 132 2007 39,184-27,842 1,930,676 1,997,702 2.61 154 2008 45,478 - - 2,024,667 2,070,145 2.74 160 2009 41,937 - - 1,966,854 2,008,791 2.72 156 2010 30,132 - - 1,899,167 1,929,299 2.78 146 2011 38,816 - - 1,902,052 1,940,868 2.74 146 2012 32,532 - - 1,832,145 1,864,677 2.40 140 2013 28,050 - - 1,772,905 1,800,955 2.26 134 2014 23,956 14,002-1,769,950 1,807,908 N/A 133 2015 19,103 9,785-1,703,977 1,732,865 N/A 126 Source: The School District of Palm Beach County - Accounting Services Amounts presented are net of related premiums, discounts and adjustments Detail regarding the District's outstanding debt can be found in the notes to the basic financial statements. (1) See Table 18 for personal income and per capita data. 137

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA COMPUTATION OF LEGAL DEBT MARGIN LAST TEN FISCAL YEARS (UNAUDITED) (amounts expressed in thousands) The Florida State Board of Education Administrative Rule 6A-1.37(2) establishes a parameter on bonded indebtedness for school districts. Limits are computed as a stated percentage of the nonexempt assessed value of taxable property as of the most current year. 2006 2007 2008 2009 Limit of bonded indebtedness, 10% of net assessed value of taxable property $13,055,991 $16,125,219 $17,022,914 $16,823,790 Total bonded debt 96,655 67,026 45,478 41,937 Less amount available in Debt Service Funds 34,867 32,032 944 842 Total amount applicable to debt limit 61,788 34,994 44,534 41,095 Legal debt margin on bonded debt $12,994,203 $16,090,225 $16,978,380 $16,782,695 Legal debt margin on bonded debt as a 99.53% 99.78% 99.74% 99.76% percentage of bonded debt limit Source: The School District of Palm Beach County - Accounting Services 138

TABLE 13 2010 2011 2012 2013 2014 2015 $14,811,991 $13,446,967 $13,204,871 $13,271,903 $13,831,033 $14,973,453 30,132 38,816 32,532 26,370 23,956 19,103 768 884 792 676 535 326 29,364 37,932 31,740 25,694 23,421 18,777 $14,782,627 $13,409,035 $13,173,131 $13,246,209 $13,807,612 $14,954,676 99.80% 99.72% 99.76% 99.81% 99.83% 99.87% 139

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA TABLE 14 RATIO OF NET GENERAL BONDED DEBT TO ASSESSED VALUE AND NET BONDED DEBT PER CAPITA LAST TEN FISCAL YEARS (UNAUDITED) (amounts expressed in thousands - except per capita) RATIO OF LESS NET BONDED NET GROSS DEBT NET DEBT TO FISCAL POPULA- ASSESSED BONDED SERVICE BONDED NET ASSESSED YEAR TION (1) VALUE (2) DEBT FUNDS DEBT VALUE NET BONDED DEBT PER CAPITA (IN DOLLARS) 2006 1,284,767 $ 130,262,743 $ 96,655 $ 34,867 $ 61,788 0.05% $ 48 2007 1,294,705 161,252,193 67,026 32,032 34,994 0.02% 27 2008 1,294,100 170,229,136 45,478 944 44,534 0.03% 34 2009 1,287,344 168,237,902 41,937 842 41,095 0.02% 32 2010 1,320,134 148,119,913 30,132 768 29,364 0.02% 22 2011 1,325,743 134,469,675 38,816 884 37,932 0.03% 29 2012 1,335,415 132,048,706 32,532 792 31,740 0.02% 24 2013 1,345,652 132,719,029 26,370 676 25,694 0.02% 19 2014 1,360,183 138,310,329 23,956 535 23,421 0.02% 17 2015 1,378,417 149,734,529 19,103 326 18,777 0.01% 14 (1) Source: University of Florida, Bureau of Business and Economic Research (preliminary). (2) Source: Palm Beach County Property Appraiser's Office. 140

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA TABLE 15 CURRENT DEBT RATIOS AND BONDED DEBT PER CAPITA OF PALM BEACH COUNTY - COMPUTATION OF DIRECT AND OVERLAPPING DEBT (UNAUDITED) FACTORS: Direct Debt: School District of Palm Beach County Debt - In Thousands Certificate of Participation $ 1,703,977 Special Obligation (1) 19,103 Notes/Loans Payable 9,785 TOTAL DIRECT DEBT 1,732,865 Overlapping Debt: (2) Palm Beach County - In Thousands Total Outstanding Debt $1,280,806 Estimated Percentage Applicable (3) 13.66% TOTAL OVERLAPPING DEBT 174,931 TOTAL DIRECT AND OVERLAPPING DEBT $1,907,796 Population of Palm Beach County 1,378,417 Assessed property valuation - In Thousands $192,820,341 Assessed taxable property valuation - In Thousands $149,734,529 DEBT RATIOS: PERCENT OF PERCENT OF ASSESSED ASSESSED TAXABLE PROPERTY PROPERTY PER VALUATION VALUATION CAPITA (4) Direct debt 0.90% 1.16% $ 1,257 Overlapping debt 0.09% 0.12% $ 127 Direct and overlapping debt 0.99% 1.27% $ 1,384 (1) Special obligation debt is payable from motor vehicle license taxes. (2) Overlapping governments are those whose geographic area coincides at least in part with the area of the District. (3) Percent of County's General Obligation Bonds to County's Total Primary Government Debt as shown in Palm Beach County CAFR (4) Represents gross debt per capita. Net bonded debt per capita is reported in Table 14. 141

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA TABLE 16 RATIO OF ANNUAL DEBT SERVICE EXPENDITURES FOR GENERAL BONDED DEBT TO TOTAL GENERAL FUND EXPENDITURES LAST TEN FISCAL YEARS (UNAUDITED) (amounts expressed in thousands) RATIO OF DEBT SERVICE TOTAL TOTAL TO TOTAL DEBT GENERAL FUND GENERAL FUND YEAR PRINCIPAL INTEREST SERVICE EXPENDITURES EXPENDITURES 2006 $ 58,861 $ 67,082 $ 125,943 $ 1,258,429 10.01% 2007 67,915 72,753 140,668 1,341,872 10.48% 2008 78,960 87,602 166,562 1,404,762 11.86% 2009 58,705 96,968 155,673 1,376,323 11.31% 2010 62,930 90,803 153,733 1,299,514 11.83% 2011 64,035 88,131 152,166 1,280,798 11.88% 2012 61,405 84,672 146,077 1,354,015 10.79% 2013 60,815 84,837 145,652 1,413,917 10.30% 2014 68,350 116,440 184,790 1,517,057 12.18% 2015 74,822 73,471 148,293 1,535,440 9.66% Note: Debt amounts reported include Certificates of Participation. Source: The School District of Palm Beach County - Accounting Services 142

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA TABLE 17 PLEDGED-REVENUE COVERAGE LAST TEN FISCAL YEARS (UNAUDITED) (amounts expressed in thousands) STATE BOARD OF EDUCATION BONDS MOTOR FISCAL VEHICLE DEBT SERVICE YEAR LICENSE TAX PRINCIPAL INTEREST COVERAGE 2006 $ 5,815 $ 3,620 $ 1,309 1.18 2007 5,687 3,800 2,022 0.98 2008 4,508 2,775 1,827 0.98 2009 4,575 2,970 1,705 0.98 2010 4,669 3,190 1,553 0.98 2011 5,444 3,830 1,471 1.03 2012 5,633 4,075 1,647 0.98 2013 5,615 4,280 1,441 0.98 2014 5,619 4,485 1,244 0.98 2015 5,010 4,220 907 0.98 Note: Details regarding the District's outstanding debt can be found in Note 9 and Note 10 of the notes to the financial statements. 143

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA TABLE 18 DEMOGRAPHIC STATISTICS LAST TEN FISCAL YEARS (UNAUDITED) TOTAL AVERAGE PALM BEACH PERSONAL NUMBER OF COUNTY INCOME (2) PER CAPITA ENROLLED UNEMPLOYMENT YEAR POPULATION (1) (IN THOUSANDS) INCOME (2) STUDENTS (3) PERCENTAGE (4) 2006 1,284,767 $ 71,061,748 $ 55,311 174,570 3.4 2007 1,294,705 76,577,917 59,147 171,845 4.3 2008 1,294,100 74,099,427 58,358 171,085 6.5 2009 1,287,344 73,546,909 57,461 171,570 10.8 2010 1,320,134 69,488,201 52,526 174,341 11.7 2011 1,325,743 71,432,467 53,500 174,818 10.7 2012 1,335,415 75,461,490 41,012 174,594 8.8 2013 1,345,652 79,564,774 57,985 177,797 7.4 2014 1,360,183 N/A N/A 180,172 5.9 2015 1,378,417 N/A N/A 183,447 5.2 (1) Source: University of Florida, Bureau of Business and Economic Research (preliminary). (2) Source: U.S. Department of Commerce, Bureau of Economic Analysis, Per capita personal income for Palm Beach County, FL (3) Source: The School District of Palm Beach County - Data Management Systems Student Information File. (4) Source: Agency for Workforce Innovation Florida Research & Economic Database N/A=Not available. 145

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA PRINCIPAL TAXPAYERS (IN THOUSANDS) AND TEN LARGEST PRIVATE EMPLOYERS PALM BEACH COUNTY JUNE 30, 2015 (UNAUDITED) 2014 TAXPAYER (1) TYPE OF BUSINESS TAXES RANK 2015 PERCENT OF TOTAL AGGREGATE TAX LEVY Florida Power & Light Company Utility $ 77,409 1 2.47% Town Center Retail Mall 7,506 2 0.24% BellSouth Telecommunications 5,859 3 0.19% U.S. Sugar Corporation Agriculture 5,183 4 0.17% Comcast of Florida/Georgia LLC Cable/Internet Provider 4,955 5 0.16% Gardens Venture LLC 4,920 6 0.16% Breakers Hotel - Palm Beach Resort Hotel 4,737 7 0.15% Okeelanta Corporation Agriculture 3,621 8 0.12% Panthers BRHC Ltd. Resort Hotel 3,494 9 0.11% Hub Properties Trust (Arvida Park, Boca Raton) 3,052 10 0.10% TJ Palm Beach Assoc. Ltd. Ptnrs. Retail Mall - 0.00% Lawrence L. Landry Charitable Foundation West Palm Beach CRA Lessor Office Building Total principal taxpayers $ 120,737 3.87% NUMBER OF Ten Largest Private Employers (Excludes Agricultural) (2) EMPLOYEES RANK 2015 PERCENT OF TOTAL COUNTY EMPLOYMENT Tenet Healthcare Corp 6,100 1 0.89% NextEra Energy (Florida Power & Light) 3,854 2 0.56% Hospital Corporation of America (3) 2,714 3 0.40% Bethesda Memorial Hospital 2,600 4 0.38% Boca Raton Regional Hospital (4) 2,500 5 0.37% Veterans Health Administration 2,500 6 0.37% Jupiter Medical Center 2,000 7 Breakers Hotel - Palm Beach 2,000 8 0.29% Office Depot 2,000 9 0.29% Wells Fargo 1,367 10 Boca Raton Resort & Club 1,292 0.19% Total 28,927 3.74% (1) Source: Palm Beach County Tax Collector's Office. (2) Source: Palm Beach County Business Development Board. (3) Hospital Corporation of America was operating as Columbia Palm Beach Health Care System in 2004 (4) Boca Raton Regional Hospital was operating as Boca Raton Community Hospital in 2004 146

TABLE 19 2005 TAXES 2006 RANK PERCENT OF TOTAL AGGREGATE TAX LEVY $ 22,908 1 0.80% 4,619 4 0.16% 10,804 2 0.38% 5,321 3 0.19% - - 40,674 6 1.43% 3,262 8 0.11% 4,253 5 0.15% - 3,022 9 0.11% 3,399 7 0.12% 2,946 10 0.10% $ 101,207 3.55% NUMBER OF EMPLOYEES 2006 RANK PERCENT OF TOTAL COUNTY EMPLOYMENT 5,000 1 0.79% 2,924 3 0.46% 3,750 2 0.59% - 0.00% 1,800 7 0.29% 1,400 8 0.22% 1,400 9 0.22% 1,800 6 0.29% 2,680 4 0.42% 0.00% 2,200 5 0.35% 22,954 3.63% 147

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA PROPERTY VALUE OF BUILDING PERMITS ISSUED, CONSTRUCTION AND BANK DEPOSITS LAST TEN FISCAL YEARS (UNAUDITED) (amounts expressed in thousands) COMMERCIAL CONSTRUCTION (1) RESIDENTIAL CONSTRUCTION (1) COMMERCIAL AND SINGLE & FISCAL PUBLIC BUILDING OTHER (4) MULTI-FAMILY YEAR VALUATION VALUATION UNITS VALUATION 2006 $ 190,414 $ 654,135 $ 7,806 $ 1,068,926 2007 192,791 568,717 2,264 504,192 2008 167,621 376,894 1,196 340,385 2009 185,484 331,606 634 186,886 2010 118,420 266,392 768 215,254 2011 118,137 188,835 1,049 278,202 2012 166,583 140,035 1,580 411,211 2013 186,244 141,270 2,055 553,779 2014 340,214 186,098 1,987 595,492 2015 254,990 187,408 2,136 619,229 (1) Source: Palm Beach County Planning, Zoning & Building Data represents the unincorporated area of Palm Beach County (2) Source: Internet address www2.fdic.gov/sod as of June 30 (3) Source: Palm Beach County Property Appraiser's Office. (4) Includes hotels, motels, cabins, mobile home parks, and non-residential alterations and additions. 148

TABLE 20 BANK DEPOSITS (2) PROPERTY VALUES (3) SAVINGS AND TOTAL COMMERCIAL LOAN COMMERCIAL RESIDENTIAL GOVERNMENT VALUE $ 21,335,000 $ 15,858,000 $ 24,661,710 $ 141,606,809 $ 6,329,122 $ 172,597,641 25,313,000 12,603,000 31,123,445 186,122,863 7,683,455 224,929,763 26,760,000 9,501,000 33,559,342 186,691,396 7,971,919 228,222,657 31,813,000 7,217,000 34,630,140 171,730,204 8,694,043 215,054,387 32,093,000 6,499,000 33,102,719 138,064,954 8,722,186 179,889,858 32,136,000 5,773,000 28,909,178 119,853,487 8,180,089 156,942,754 33,720,000 3,296,000 27,681,108 118,197,808 7,979,243 153,858,160 36,761,000 2,362,000 29,256,646 124,839,922 8,198,530 162,295,099 38,274,000 2,295,000 29,142,126 124,767,998 8,198,778 162,108,902 42,750,000 2,285,000 32,139,134 141,889,587 8,854,820 182,883,541 149

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA COMPARATIVE ENROLLMENT TRENDS FIFTEEN LARGEST SCHOOL DISTRICTS LAST TEN YEARS (UNAUDITED) RANK SCHOOL DISTRICT 2005 2006 2007 2008 1 New York City, NY 986,967 1,014,058 997,618 989,941 2 Los Angeles, CA 741,367 727,319 707,627 693,680 3 Chicago, IL 426,812 420,982 413,694 407,510 4 Miami -Dade County, FL 368,933 362,070 353,790 348,128 5 Clark County, NV 283,221 294,131 303,448 309,051 6 Broward County, FL 274,591 271,630 262,813 258,893 7 Houston, TX 208,945 210,292 202,936 199,534 8 Hillsborough County, FL 189,469 193,757 193,517 193,180 9 Orange County, FL 173,331 175,609 175,245 174,142 10 State of Hawaii 183,185 182,818 180,728 179,897 11 Fairfax County, VA 164,765 163,753 163,952 165,722 12 Palm Beach County, FL 175,076 174,935 171,431 170,883 13 Gwinnett County, GA 14 Dallas, TX 158,027 161,244 159,144 157,804 15 Philadelphia, PA 187,547 184,560 178,241 172,704 Based on students enrolled in grades kindergarten through twelve during the fall. Rank is based on most current fiscal year enrollment. Fiscal year 2015 information will not be available until next fiscal year. Source: The National Center for Education Statistics. 150

TABLE 21 2009 2010 2011 2012 2013 2014 981,690 1,014,020 995,336 990,145 989,387 988,931 687,534 670,746 667,273 659,639 655,455 653,826 421,430 407,157 405,644 403,004 395,948 396,641 345,525 345,804 347,366 350,239 354,262 356,233 312,761 307,059 314,059 313,398 316,778 320,532 256,351 256,137 256,472 258,478 260,226 262,666 200,225 202,773 204,245 203,066 203,354 211,552 192,007 193,265 194,525 197,041 200,466 203,439 172,257 173,259 176,008 180,000 183,066 187,092 179,478 180,196 179,601 182,706 184,760 186,825 169,030 171,956 174,479 177,606 180,616 183,417 170,757 172,897 174,663 176,901 179,514 182,895 159,296 160,744 162,370 164,976 169,150 157,352 157,111 157,162 157,575 158,932 159,713 159,867 165,694 166,233 154,262 143,898 137,674 151

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA TABLE 22 LABOR FORCE ESTIMATES LAST TEN YEARS (UNAUDITED) LABOR FORCE ESTIMATES PALM BEACH COUNTY, FLORIDA AND THE UNITED STATES PALM BEACH COUNTY UNEMPLOYMENT RATES (%) CIVILIAN PALM BEACH UNITED YEAR LABOR FORCE COUNTY FLORIDA STATES 2006 631,038 3.6 3.3 4.6 2007 639,916 4.3 4.0 4.6 2008 628,273 6.5 6.2 5.8 2009 619,344 10.8 10.5 9.3 2010 618,694 11.7 11.6 9.6 2011 620,081 10.7 10.5 9.0 2012 634,732 8.8 8.6 8.1 2013 648,891 7.4 7.2 7.4 2014 688,244 5.9 6.3 6.2 2015 [1] 684,411 5.2 5.6 5.5 (1) Preliminary. Average through September 2015 (not seasonally adjusted) Source: Agency for Workforce Innovation Florida Research & Economic Database 153

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA EMPLOYMENT DISTRIBUTION BY MAJOR INDUSTRY LAST TEN YEARS (UNAUDITED) PALM BEACH COUNTY EMPLOYMENT DISTRIBUTION BY MAJOR INDUSTRY Contract Year Manufacturing Construction Transportation Trade 2005 19,400 42,400 9,900 93,100 2006 20,400 47,100 10,000 96,300 2007 19,200 45,500 10,300 97,600 2008 18,300 36,100 10,300 95,100 2009 16,300 27,500 9,600 88,500 2010 15,000 24,000 8,000 87,000 2011 14,700 23,000 8,800 88,900 2012 15,200 24,000 9,000 90,800 2013 15,500 26,400 9,500 93,400 2014 16,300 28,200 10,400 94,200 Source: Florida Department of Labor and Employment Security, Division of 154

TABLE 23 PALM BEACH COUNTY EMPLOYMENT DISTRIBUTION BY MAJOR INDUSTRY (CONTINUED) Finance Services Government Total 39,400 304,300 65,200 573,700 40,600 305,600 65,700 585,700 40,700 283,900 66,500 563,700 38,900 277,300 67,200 543,200 34,900 261,300 66,700 504,800 35,000 265,000 66,000 500,000 35,900 270,100 62,500 503,900 36,600 281,600 62,500 519,700 37,800 296,200 61,600 540,400 38,700 313,100 61,700 562,600 155

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA SCHOOL FOOD SERVICE OPERATING DATA LAST TEN FISCAL YEARS (UNAUDITED) 2005/06 2006/07 2007/08 Days meals served: Regular school program 180 180 180 Total pupil lunches served Paid lunches 3,486,769 3,900,247 3,654,980 Reduced lunches 899,406 1,219,907 1,214,814 Free lunches 8,756,702 7,871,168 7,951,941 Total pupil lunches served 13,142,877 12,991,322 12,821,735 Average number of pupil lunches served daily (regular): Paid lunches 19,371 21,668 20,304 Reduced lunches 4,997 6,777 6,749 Free lunches 48,648 43,729 44,177 Total average pupil lunches served daily 73,016 72,174 71,231 Number of pupil breakfasts served (regular): Paid breakfasts 414,748 536,438 597,893 Reduced breakfasts 201,069 313,840 352,856 Free breakfasts 3,596,542 3,674,792 3,983,650 Total pupil breakfasts served 4,212,359 4,525,070 4,934,399 Average number of pupil breakfasts served daily (regular): Paid breakfasts 2,304 2,980 3,322 Reduced breakfasts 1,117 1,744 1,960 Free breakfasts 19,981 20,416 22,131 Total average pupil breakfasts served daily 23,402 25,140 27,413 Number of adult lunches served (regular) 463,151 446,651 431,762 Average number of adult lunches served daily (regular) 2,573 2,481 2,399 REVENUES (IN THOUSANDS): Federal sources: Federal assistance $ 29,327 $ 29,325 $ 31,064 USDA donated food 2,984 2,126 2,680 State sources - State supplement 869 853 911 Local sources: Local food service sales: Students 20,119 21,795 21,814 Adults 1,402 1,351 1,306 Other 1,979 2,252 2,090 Interest on investments 544 1,019 745 TOTAL REVENUES $ 57,224 $ 58,721 $ 60,610 TOTAL COST AND OTHER FINANCING USES - Net $ 57,065 $ 57,626 $ 60,925 Source - The School District of Palm Beach County School Food Service Department 156

TABLE 24 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 180 180 180 180 180 180 180 3,333,901 3,346,432 3,271,823 3,221,528 3,033,273 2,999,416 3,105,281 1,190,189 1,137,135 953,139 1,096,907 901,181 745,399 796,359 8,382,530 9,575,363 10,581,277 11,301,427 11,953,474 12,853,471 13,021,892 12,906,620 14,058,930 14,806,239 15,619,862 15,887,928 16,598,286 16,923,532 18,522 18,591 18,177 17,897 16,852 16,663 17,252 6,612 6,317 5,295 6,094 5,007 4,141 4,424 46,570 53,196 58,785 62,786 66,408 71,408 72,344 71,704 78,105 82,257 86,777 88,266 92,212 94,020 612,418 802,043 921,316 1,032,181 1,395,381 1,388,567 1,492,436 391,125 446,122 481,680 480,603 481,008 416,806 430,115 4,169,667 4,652,907 5,104,743 5,420,994 5,754,749 6,122,378 6,052,523 5,173,210 5,901,072 6,507,739 6,933,778 7,631,138 7,927,751 7,975,074 3,402 4,456 5,118 5,734 7,752 7,714 8,291 2,173 2,478 2,676 2,670 2,672 2,316 2,390 23,165 25,849 28,360 30,117 31,971 34,013 33,625 28,740 32,784 36,154 38,521 42,395 44,043 44,306 500,777 461,276 422,422 407,943 379,496 255,664 230,221 2,782 2,563 2,347 2,266 2,108 1,420 1,279 $ 34,996 $ 40,237 $ 44,029 $ 47,956 $ 52,677 $ 57,459 $ 60,356 2,999 2,753 3,513 3,323 3,754 4,359 5,097 937 926 928 952 948 1,000 1,015 19,962 17,694 16,219 14,897 13,290 12,721 12,075 1,154 999 897 873 789 767 691 2,625 1,796 1,162 838 726 670 527 298 124 73 38 28 56 57 $ 62,971 $ 64,529 $ 66,821 $ 68,877 $ 72,213 $ 77,032 $ 79,818 $ 60,738 $ 63,397 $ 65,477 $ 68,098 $ 71,736 $ 75,083 $ 78,073 157

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA SCHEDULE OF INSURANCE IN FORCE AS OF JUNE 30, 2015 (UNAUDITED) POLICY/NUMBER INSURANCE COMPANY COVERAGE Petroleum Contamination Commerce and Industry Leakage of underground motor Liability Insurance Company vehicle petroleum storage tanks FPL 1953656#8 All Risk Property Lexington Insurance School Board buildings including 019946411 personal property & extra expense $5.3 billion of property values National Flood Ins. Program Plastridge Flood protection for 30 locations and 118 individual policies 118 buildings in flood zones A & V Boiler & Machinery CNA Insurance Group Accidental breakdown of boilers, FBP 9450705 Pol # R 5091214492 pressure vessels and steam generators Crime Travelers Insurance Company 1) Loss to the District due 105126343 to the dishonesty of any School Board employee 2) Destruction, disappearance or theft of District money or securities while in a District building, in a banking institution, or while being transported by an authorized employee or armored vehicle company 3) Forgery losses on checking and savings accounts Superintendent & School Travelers Insurance Company State required Public Officials' bonds Members' Public Official Bonds Master Builders Risk 7521726 Lexington Insurance Co. New schools under construction High School Graduations Provided by South Florida Fair Grounds Source: The School District of Palm Beach County - Department of Risk Management. 158

TABLE 25 (Continued) DEDUCTIBLE OR ESTIMATED SELF-INSURED ANNUAL POLICY PERIOD RETENTION POLICY LIMITS PREMIUM 07/13/14-07/13/15 $10,000 $1 million per incident, $ 12,202 $4 million annual aggregate 12/31/14-12/31/15 $10 million first layer deduct $100 million $ 7,592,170 for all perils other than wind catastrophic limits storm. In addition also have $25 million flood a 5% of values deductible $1 million extra expense with a $500K min per location 04/30/15-04/30/16 $50,000 per building $1 million per building $ 253,419 $50,000 for contents $500,000 Building $500,000 Contents 12/31/14-12/31/15 $10,000 $100 million per accident $ 55,000 08/07/14-08/07/15 1) $100,000 per loss 1) $5 million per loss $ 33,220 2) $1,000 2) $100,000 per loss 3) $10,000 3) $10,000 Under Crime Insurance 03/31/15-08/31/15 $25,000 all perils $25 million aggregate to a sublimit of $10 million for any one loss occurrence and $10 million aggregate in one policy year for a named windstorm 5% wind $250,000 min 15/30 million per occurrence windstorm $ 240,605 159 (Continued)

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA SCHEDULE OF INSURANCE IN FORCE AS OF JUNE 30, 2015 (UNAUDITED) POLICY/NUMBER INSURANCE COMPANY COVERAGE Employee Dental United Health Care Employee Dental Option 1 - S500PB with Orthodontia Option 2 - S700 with Orthodontia Option 3 - PPO P5215 With Orthodontia Option 4 - PPO P5105 (No Orthodontia) Employee Vision Eye Med Employee vision VC 19 Employee Assistance Plan Corporate Care Works, Inc. Unlimited treatments Term Life Insurance Met Life Employee death benefits Source: The School District of Palm Beach County - Department of Risk Management. 160

TABLE 25 (Continued) DEDUCTIBLE OR ESTIMATED SELF-INSURED ANNUAL POLICY PERIOD RETENTION POLICY LIMITS PREMIUM 01/01/14-12/31/15 Individual monthly premiums: Paid by employee $16.00 Emp; $34.00 Emp & Children, $30.54 Emp & Spouse, $44.00 Emp & Family No annual limits $12.16 Emp; $26.00 Emp & Children, $21.14 Emp & Spouse, $33.30 Emp & Family No annual limits $33.34 Emp; $91.68 Emp & Children, $81.68 Emp & Spouse, $123.36 Emp & Family $1,000 limit per year $25.00 Emp; $68.76 Emp & Children, $61.28 Emp & Spouse, $92.54 Emp & Family occurrence; 01/01/14-12/31/15 Individual premiums Limited schedule of benefits Paid by employee $5.24 single $13.45 family 01/01/14-12/31/15 Board paid Financial and legal services $ 300,292 $1.20 per employee excluded (Actual amount) per month 01/01/14-12/31/17 $3.90 individual monthly $10,000 part-time employee $ 1,450,743 premium for part-time employees (Actual amount) Board paid $4.30 individual monthly $20,000 full-time employee premium for full-time employees Board paid (Continued) 161

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA SCHEDULE OF INSURANCE IN FORCE AS OF JUNE 30, 2015 (UNAUDITED) POLICY/NUMBER INSURANCE COMPANY COVERAGE High School Monumental Life Ins. Co. Medical expenses for students Interscholastic injured while participating in Athletic high school interscholastic FL 05 athletics Student Monumental Life Ins. Co. 1) Medical benefits for up to 5 years for Catastrophe students injured while participating FL 04 in school supervised activities 2) Disability benefits for up to 10 years for interscholastic athletic injuries Student CAN Financial Corp. Professional liabilities for Malpractice health occupation students 127268148 Housemovers Bond Travelers Insurance Company Moving portable classrooms 104124915 Vendors Liability Scottsdale Insurance Group General liability for permittees CPS1019083 and licensees of the District Summer Camp Liability Scottsdale Insurance Group General liability claims arising out of CPS1197342 summer camp activities Owners Protective Zurich American Architectural professional liability Professional Indemnity on new construction EOC 9276749 02 Source: The School District of Palm Beach County - Department of Risk Management. 162

TABLE 25 (Concluded) DEDUCTIBLE OR ESTIMATED SELF-INSURED ANNUAL POLICY PERIOD RETENTION POLICY LIMITS PREMIUM 08/01/14-08/01/15 None $25,000 per person $ 1,079,440 08/01/14-08/01/15 1) $25,000 per student, 1) $5 million $ 189,523 per accident 2) None 2) $600,000 per student 12/31/14-12/31/15 None $1 million per claim $ 12,479 ($5 million annual aggregate) 06/01/15-06/01/16 None $10,000 $ 101 07/01/14-07/01/15 $500 per claimant $1 million each occurrence (paid by vendor) $2 million aggregate 06/07/15-08/11/15 None $1 million per claim $ 35,121 $2 million aggregate (paid by campers) 06/01/14-06/01/15 $100,000 $10 million $ 124,833 minimum and deposit (Concluded) 163

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA TABLE 26 TEACHERS' SALARIES - LAST TEN FISCAL YEARS (UNAUDITED) FISCAL MINIMUM MAXIMUM MEAN YEAR SALARY SALARY SALARY 2006 $ 33,494 $ 67,926 $ 50,710 2007 33,830 70,409 52,120 2008 36,100 75,848 55,974 2009 36,822 77,245 57,034 2010 36,822 77,245 57,034 2011 36,822 77,245 57,034 2012 37,322 77,745 57,534 2013 38,000 79,245 58,623 2014 39,000 79,245 59,123 2015 39,500 81,230 60,365 Source: The School District of Palm Beach County - Division of Personnel Relations. 165

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA FULL TIME STAFF BY ASSIGNMENT LAST TEN FISCAL YEARS (UNAUDITED) 2006 2007 2008 2009 Assignment Administrators 184 216 204 194 Supervisors of instruction 39 41 45 38 Principals 171 194 198 192 Assistant principals 336 339 340 350 Classroom teachers - Elementary 4,296 4,399 4,404 4,714 Classroom teachers - Secondary 4,326 4,752 4,826 4,552 ESE teachers 1,680 1,691 1,706 1,630 Other teachers 477 445 432 388 Guidance counselors 366 383 378 352 Social workers 20 21 22 24 Psychologists 71 74 78 77 Media center 147 117 117 121 Professional - (instructional) 346 365 431 593 Professional - (non-instructional) 718 749 805 819 Aides 1,727 1,742 1,735 1,580 Technicians 237 230 281 286 Secretarial/clerical 1,397 1,390 1,431 1,402 Service workers 2,786 2,840 2,927 2,951 Skilled crafts 328 319 315 312 Unskilled labors 44 42 44 35 Total Full Time Employees 19,696 20,349 20,719 20,610 Source: Florida Department of Education Statistical Brief " Staff in Florida's Public Schools". Data includes only full time staff on the survey date. 166

TABLE 27 2010 2011 2012 2013 2014 2015 179 142 135 140 155 164 82 12 13 10 11 16 209 208 212 213 224 224 354 358 364 372 382 381 4,624 4,668 4,945 5,042 5,172 5,175 4,624 4,599 4,656 4,729 4,881 4,888 1,658 1,745 1,833 1,923 2,030 2,030 380 103 114 103 108 155 361 365 363 367 378 383 27 63 63 66 68 75 78 83 81 83 83 92 135 134 134 131 132 133 704 976 834 883 930 913 789 750 693 703 759 777 1,384 1,713 1,784 1,547 1,699 1,785 278 279 275 269 265 267 1,501 1,498 1,427 1,417 1,463 1,503 3,168 2,851 2,535 2,795 2,863 2,904 291 279 247 240 231 214 44 58 47 43 39 36 20,870 20,884 20,755 21,076 21,873 22,115 167

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA TABLE 28 OPERATING STATISTICS LAST TEN FISCAL YEARS (UNAUDITED) TOTAL UNWEIGHTED FULL PUPIL/ FISCAL TIME ENROLLMENT CURRENT COST PER PERCENTAGE TEACHING TEACHER YEAR (FTE) (1) EXPENDITURES PUPIL CHANGE STAFF RATIO 2006 172,527 $ 1,431,013 $ 8,294 7.86% 10,779 16.0 2007 169,824 1,508,955 8,885 7.12% 11,287 15.0 2008 169,280 1,572,230 9,288 4.53% 11,368 14.9 2009 169,554 1,552,545 9,157-1.41% 11,284 15.0 2010 171,722 1,568,943 9,137-0.22% 11,286 15.2 2011 172,829 1,584,911 9,170 0.37% 11,115 15.5 2012 175,083 1,546,122 8,831-3.70% 11,548 15.2 2013 177,797 1,605,444 9,030 2.25% 11,797 15.1 2014 180,285 1,738,156 9,641 6.77% 12,191 14.8 2015 183,489 1,750,240 9,539-1.06% 12,248 15.0 Source: The School District of Palm Beach County - Accounting Services (1) Source: Florida Department of Education. 168

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA TABLE 29 BUILDING INFORMATION LAST TEN FISCAL YEARS (UNAUDITED) Fiscal Year 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 Acreage Pines Elementary (1985) Square feet 85,956 85,956 85,958 85,958 91,272 94,392 95,182 95,182 93,724 93,724 Capacity 553 553 553 553 543 543 543 543 543 543 Enrollment 450 412 425 434 458 456 500 535 539 579 Addison Mizner Elementary (1966) Square feet 98,547 98,547 98,547 99,411 95,571 95,571 95,571 95,571 92,207 92,207 Capacity 996 996 996 924 924 924 924 888 812 776 Enrollment 839 878 872 955 923 901 849 857 869 879 Allamanda Elementary (1964) (Modernization 2008) * Square feet 129,697 130,872 130,872 130,872 130,872 130,872 130,872 101,824 85,481 85,481 Capacity 740 720 720 720 834 834 834 694 694 694 Enrollment 629 621 661 647 631 582 548 510 521 535 Atlantic High (1949) ( Modernization 2004) Square feet 410,680 410,680 410,680 410,680 410,680 410,680 408,139 408,195 402,435 402,435 Capacity 2,444 2,444 2,444 2,444 2,436 2,437 2,365 2,450 2,347 2,347 Enrollment 2,220 2,125 2,085 2,156 2,258 2,374 2,423 2,530 2,429 2,363 Bak Middle School of the Arts (1965) (Modernization 2004) * Square feet 217,585 223,324 223,324 223,324 223,324 223,324 222,884 222,884 222,884 222,884 Capacity 1,406 1,335 1,335 1,335 1,335 1,335 1,335 1,335 1,346 1,346 Enrollment 1,341 1,342 1,355 1,360 1,359 1,358 1,360 1,368 1,385 1,372 Banyan Creek Elementary (1960) (Modernization 2013) Square feet 141,298 143,788 141,298 140,673 140,673 143,031 138,917 138,134 106,045 106,045 Capacity 1,136 1,136 1,136 1,200 1,136 1,122 1,104 1,122 587 587 Enrollment 944 945 917 967 976 1,031 919 886 832 804 Barton Elementary (1985) (Modernization 2007) Square feet 154,476 154,476 154,476 154,476 154,476 154,476 154,476 153,826 155,555 28,139 Capacity 1,400 1,400 1,400 1,400 1,426 1,426 1,426 1,369 964 774 Enrollment 896 818 759 900 846 869 588 595 586 659 Beacon Cove Elementary(3-5) (2000) Square feet 121,247 120,487 120,487 120,487 120,487 120,487 118,951 119,104 114,296 114,296 Capacity 1,001 1,001 1,001 1,001 1,001 979 915 933 841 787 Enrollment 843 922 1,001 940 917 875 881 1,010 1,006 949 Bear Lakes Middle (1986) Square feet 180,507 180,507 180,507 179,525 179,525 179,525 180,045 180,045 202,671 202,671 Capacity 1,432 1,432 1,432 1,491 1,599 1,599 1,599 1,599 1,262 1,065 Enrollment 744 779 777 743 780 774 920 842 874 984 Belle Glade Elementary (1985) Square feet 120,366 120,366 120,366 125,934 125,934 126,798 108,243 111,607 111,607 111,607 Capacity 978 978 978 978 978 782 782 782 782 782 Enrollment 565 523 481 476 549 594 522 549 616 667 Belvedere Elementary (1996) Square feet 96,315 94,677 94,677 94,428 94,428 94,428 94,428 94,869 93,729 93,729 Capacity 658 658 658 658 658 648 648 648 640 640 Enrollment 528 547 517 562 553 547 593 570 564 529 Benoist Farms Elementary (2003) Square feet 117,508 117,508 117,508 117,508 117,508 117,508 117,508 104,028 104,028 104,028 Capacity 856 856 856 856 882 882 882 774 774 774 Enrollment 514 646 633 624 677 740 684 610 547 646 Berkshire Elementary (1958) (Modernization 2007) Square feet 138,137 138,137 138,137 138,137 138,137 138,137 135,490 138,701 138,149 97,012 Capacity 1,229 1,229 1,229 1,229 1,229 1,211 1,247 1,208 964 648 Enrollment 1,088 1,126 1,108 1,073 978 1,027 953 847 593 613 Binks Forest Elementary (1999) Square feet 135,380 135,380 125,952 125,952 125,952 125,952 125,696 125,696 125,696 125,696 Capacity 1,206 1,206 1,206 1,206 1,206 1,206 1,206 1,206 1,206 1,134 Enrollment 1,018 1,065 1,042 1,060 1,115 1,121 1,095 1,167 1,178 1,208 Boca Raton Elementary (2001) Square feet 67,630 67,630 67,630 67,630 67,630 67,630 67,630 66,010 66,010 66,010 Capacity 401 401 401 401 401 401 401 401 383 383 Enrollment 305 344 343 354 380 345 394 386 369 367 Boca Raton High (1963) (Modernization 2006) Square feet 353,579 353,579 353,579 352,859 352,859 349,216 349,216 345,080 406,162 328,534 Capacity 2,928 2,928 2,928 2,798 2,786 2,784 2,807 2,772 1,906 1,906 Enrollment 3,133 3,068 3,022 2,993 2,926 2,823 2,567 2,325 2,198 1,990 Boca Raton Middle (1968) (Modernization 2007) Square feet 195,394 195,394 195,394 195,394 195,394 195,394 195,394 194,312 194,312 155,273 Capacity 1,416 1,416 1,417 1,417 1,417 1,416 1,416 1,416 1,323 1,109 Enrollment 1,489 1,413 1,382 1,308 1,338 1,378 1,352 1,203 1,050 1,108 Boynton Beach High (1999) Square feet 349,344 348,393 348,393 360,489 360,489 362,217 362,217 368,470 354,646 335,998 Capacity 2,197 2,197 2,197 1,484 2,197 2,195 2,195 2,280 2,232 2,233 Enrollment 1,804 1,673 1,723 2,197 1,465 1,394 1,387 1,435 1,550 1,744 Source - School District of Palm Beach County Planning Department. Includes only K-12 schools. 169

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA TABLE 29 (Continued) BUILDING INFORMATION LAST TEN FISCAL YEARS (UNAUDITED) Fiscal Year 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 C.O. Taylor/Kirklane Elementary (1970) (Modernization 2010) Square feet 171,830 171,432 171,432 171,432 171,444 176,486 103,020 103,020 113,735 113,735 Capacity 1,439 1,439 1,439 1,439 1,462 1,594 941 941 941 815 Enrollment 1,277 1,210 1,217 1,110 1,126 1,051 1,059 1,063 1,051 1,069 Calusa Elementary (1986) Square feet 102,936 102,106 102,106 115,390 115,403 115,403 111,563 107,769 102,593 102,593 Capacity 800 728 728 728 728 728 656 656 602 584 Enrollment 1007 897 890 829 754 795 773 739 750 736 Carver Middle (1960) Square feet 168,449 168,449 168,564 168,564 168,564 168,564 167,385 167,385 184,881 150,573 Capacity 1,534 1,535 1,534 1,534 1,534 1,503 1,503 1,503 1,145 1,145 Enrollment 876 926 940 915 904 940 914 920 1,033 1,183 Cholee Lake Elementary (2003) Square feet 135,046 129,167 129,167 129,167 129,167 132,047 133,007 133,007 127,482 124,602 Capacity 1,126 1,126 1,126 1,126 1,152 1,206 1,224 1,188 1,188 1,134 Enrollment 1,049 1,024 955 957 895 978 928 1,106 1,138 1,415 Christa McAuliffe Middle (1965) Square feet 170,940 156,923 156,923 166,523 166,523 164,084 165,560 165,560 165,560 164,104 Capacity 1,311 1,311 1,311 1,311 1,311 1,132 1,132 1,132 1,126 994 Enrollment 1,099 1,142 1,168 1,265 1,135 1,171 1,201 1,275 1,260 1,290 Citrus Cove Elementary (1965) Square feet 131,689 131,659 131,689 131,689 131,689 131,689 130,891 130,902 142,846 96,753 Capacity 1,227 1,227 1,227 1,227 1,263 1,263 1,263 1,263 651 651 Enrollment 999 931 909 980 972 927 898 833 826 905 Congress Community Middle (1960) (Modernization 2007) Square feet 192,959 192,959 192,959 192,959 192,959 192,959 192,059 192,919 192,919 123,075 Capacity 1,432 1,432 1,432 1,432 1,432 1,432 1,468 1,432 1,420 1,159 Enrollment 969 974 921 1,021 1,015 922 971 943 968 962 Conniston Middle (1992) Square feet 172,808 172,808 172,808 172,808 172,808 172,808 172,808 172,811 172,811 172,811 Capacity 1,176 1,176 1,176 1,176 1,176 1,175 1,136 1,136 1,056 1,056 Enrollment 1,163 1,147 1,100 1,097 1,003 972 935 940 946 947 Coral Reef Elementary (1999) Square feet 133,629 132,405 132,405 136,245 136,245 136,245 134,495 134,495 134,495 142,175 Capacity 1,162 1,162 1,162 1,162 1,162 1,162 1,162 1,162 1,122 738 Enrollment 935 914 914 979 1,024 1,119 1,112 1,128 1,102 1,080 Coral Sunset Elementary (1984) (Addition 2006) Square feet 129,391 129,391 129,391 129,391 129,391 129,391 129,391 131,865 131,865 131,865 Capacity 990 990 990 990 990 990 990 990 990 590 Enrollment 639 618 591 623 639 780 766 724 769 822 Crestwood Community Middle (1970) (Addition 2012) Square feet 186,261 186,261 186,261 186,261 155,786 160,034 159,718 159,718 159,718 159,718 Capacity 1,653 1,653 1,653 1,911 1,276 1,275 1,275 1,259 1,259 1,260 Enrollment 948 1,042 1,077 1,170 1,206 1,257 1,279 1,285 1,252 1,281 Crosspointe Elementary (2003) Square feet 115,515 115,515 112,252 112,252 112,267 112,267 112,267 111,647 103,967 103,967 Capacity 882 882 882 900 900 900 900 918 810 774 Enrollment 730 722 652 756 746 731 720 781 787 745 Crossroads Academy (1949) Modulars in 2009) Square feet 37,533 37533 37,533 60,898 61,185 59,447 47,855 3,840 47,855 0 Capacity 297 297 297 747 747 747 570 44 570 0 Enrollment 190 196 206 164 179 165 240 180 79 0 Crystal Lakes Elementary (1985) Square feet 103,946 103,946 103,946 103,946 104,113 104,113 103,698 103,698 95,086 95,086 Capacity 890 890 890 905 927 927 927 927 607 607 Enrollment 605 600 650 584 542 616 612 676 644 693 Cypress Trails Elementary (1985) Square feet 93,561 93,561 91,593 91,593 95,401 101,161 101,161 96,055 96,055 95,095 Capacity 803 803 803 803 1,067 983 911 839 821 659 Enrollment 439 523 500 529 565 852 884 865 878 884 Del Prado Elementary (1985) Square feet 95,918 95,918 95,918 98,606 99,646 99,646 93,886 93,355 90,475 88,555 Capacity 929 929 929 929 929 947 821 767 731 605 Enrollment 888 866 826 1,002 953 951 923 892 852 843 Dwight D. Eisenhower Elementary (1970) Square feet 207,034 207,034 207,034 207,034 220,266 220,266 220,266 209,421 91,615 92,655 Capacity 659 659 659 677 864 864 864 920 600 711 Enrollment 387 382 417 423 396 387 504 316 266 307 Diamond View Elementary (2004) Square feet 148,691 148,691 148,691 148,691 148,691 148,691 148,552 145,592 138,987 138,987 Capacity 1,130 1,130 1,130 1,130 1,130 1,130 1,076 1,076 1,094 1,022 Enrollment 874 848 956 1,079 1,086 1,026 1,023 905 881 933 Source - School District of Palm Beach County Planning Department 170

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA TABLE 29 (Continued) BUILDING INFORMATION LAST TEN FISCAL YEARS (UNAUDITED) Fiscal Year 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 Discovery Key Elementary (2000) Square feet 138,253 138,253 133,097 133,097 133,097 140,777 140,777 140,357 136,517 136,517 Capacity 1,188 1,188 1,188 1,188 1,188 1,372 1,372 1,372 1,278 1,278 Enrollment 809 863 868 914 960 955 915 1,155 1,173 1,287 Don Estridge High Tech Middle (2005) Square feet 185,874 185,874 185,874 185,874 185,874 185,874 185,874 185,732 185,732 177,982 Capacity 1,254 1,254 1,254 1,254 1,254 1,252 121 1,212 1,219 1,153 Enrollment 1,239 1,239 1,254 1,233 1,242 1,230 1,213 1,221 1,243 1,294 Dr. Mary McLeod Bethune Elementary (2000) Square feet 117,962 117,962 117,962 117,962 117,962 117,962 116,629 116,629 116,629 116,629 Capacity 806 806 806 806 806 806 794 794 794 794 Enrollment 479 423 433 508 488 487 534 568 537 545 Dreyfoos High School of the Arts Square feet 249,212 249,212 249,212 249,212 249,212 249,212 248,117 248,117 247,253 247,253 Capacity 1,218 1,218 1,218 1,218 1,285 1,216 1,175 1,229 1,229 1,229 Enrollment 1,371 1,320 1,363 1,297 1,310 1,302 1,322 1,351 1,385 1,325 Eagles Landing Middle (1993) Square feet 151,644 151,644 151,644 171,036 171,036 171,036 161,436 161,310 161,310 161,310 Capacity 1,286 1,286 1,286 1,286 1,286 1,283 1,105 1,105 1,105 1,105 Enrollment 1,300 1,317 1,303 1,304 1,340 1,332 1,338 1,222 1,237 1,266 Egret Lake Elementary (1970) Square feet 105,935 101,465 101,465 101,464 101,464 101,464 102,516 110,196 110,196 104,348 Capacity 727 727 727 727 727 727 727 724 724 580 Enrollment 670 672 582 623 544 592 631 556 491 369 Elbridge Gale Elementary (2006) Square feet 125,858 125,858 125,858 125,858 125,858 125,858 125,858 125,813 125,813 125,813 Capacity 1,038 1,038 1,038 1,038 1,038 1,038 1,056 1,056 964 964 Enrollment 963 966 993 1,003 1,005 1,035 997 888 833 283 Emerald Cove Middle 02-JJ (2007) Square feet 201,305 201,305 201,305 201,305 201,305 201,305 201,305 200,805 200,805 0 Capacity 1,409 1,409 1,409 1,409 1,409 1,409 1,490 1,431 1,323 0 Enrollment 1,224 1,227 1,237 1,164 1,113 1,128 1,136 1,063 884 0 Everglades Elementary (2010) (03-W) Square feet 119,246 119,246 119,246 119,246 119,246 0 0 0 0 0 Capacity 942 942 942 942 960 0 0 0 0 0 Enrollment 879 860 833 731 630 0 0 0 0 0 Equestrian Trails Elementary (2004) Square feet 127,383 127,383 127,383 127,383 127,383 136,983 136,983 136,983 123,313 123,313 Capacity 910 910 910 910 910 1,090 1,090 920 920 920 Enrollment 803 820 770 795 799 1,122 1,129 1,092 1,044 1,206 Forest Hill Elementary (1965) Square feet 113,446 113,446 113,446 124,966 124,966 134,224 135,032 135,032 135,032 131,192 Capacity 1,006 1,006 1,006 1,006 1,006 1,150 1,150 1,150 970 898 Enrollment 810 796 804 782 734 768 827 1,167 1,182 1,165 Forest Hill High (1971) Square feet 313,415 312,415 312,415 312,415 312,415 311,620 303,857 303,857 303,857 304,018 Capacity 1,837 1,837 1,837 1,837 1,837 1,814 1,814 1,899 1,823 1,823 Enrollment 2,197 2,013 1,905 1,838 1,858 1,876 1,882 1,972 1,849 1,814 Forest Park Elementary (1955) (Modernization 2008) Square feet 122,127 122,127 122,127 122,127 122,127 122,127 122,127 121,261 116,016 116,016 Capacity 780 780 780 780 793 793 918 632 632 632 Enrollment 564 551 574 594 570 521 479 431 458 494 Freedom Shores Elementary (2003) Square feet 135,829 135,829 135,829 135,829 145,564 146,388 142,851 142,851 133,251 133,251 Capacity 1,166 1,166 1,166 1,166 1,166 1,166 1,166 1,076 986 986 Enrollment 922 895 870 924 886 914 978 1,046 998 1,056 Frontier Elementary (2000) Square feet 118,421 118,421 116,741 116,741 116,741 116,741 116,341 116,341 114,421 114,421 Capacity 882 882 900 900 900 900 900 918 882 882 Enrollment 570 613 586 669 691 773 820 898 910 938 Galaxy Elementary (1958) (Modernization 2014) Square feet 110,476 143,992 33,516 33,516 90,255 90,255 90,255 89,943 69,023 69,023 Capacity 752 752 158 581 657 657 635 635 635 635 Enrollment 596 585 520 372 423 463 467 472 486 436 Glade View Elementary (1960) - Modernization 2015 Square feet 77,467 6,869 72,447 73,927 76,007 82,159 81,951 81,951 81,951 81,951 Capacity 403 72 580 580 580 580 580 580 580 580 Enrollment 301 314 398 348 335 399 398 416 384 432 Glades Central High (1975) Square feet 245,163 245,163 245,163 248,043 248,043 260,603 262,443 270,211 242,732 242,732 Capacity 1,572 1,572 1,572 1,572 1,572 1,571 1,571 1,499 1,499 1,499 Enrollment 982 998 1,045 1,062 1,111 1,108 1,116 1,215 1,257 1,264 Source - School District of Palm Beach County Planning Department 171

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA TABLE 29 (Continued) BUILDING INFORMATION LAST TEN FISCAL YEARS (UNAUDITED) Fiscal Year 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 Gold Coast Community School (1958) Square feet 77,878 77,878 77,878 95,447 95,447 95,447 78,164 79,501 79,421 79,501 Capacity 585 585 585 587 587 587 566 671 671 671 Enrollment 114 144 169 120 87 116 145 129 132 110 Golden Grove Elementary (1985) Square feet 106,750 106,750 106,750 106,750 117,036 117,036 117,026 117,026 117,026 117,026 Capacity 749 749 749 738 738 738 738 756 756 756 Enrollment 538 552 532 566 597 674 728 756 758 805 Gove Elementary (1964) (Modernization 2014) Square feet 230,356 230,356 129,716 129,716 132,780 132,735 134,152 134,152 115,861 108,181 Capacity 924 924 780 780 780 924 924 924 924 780 Enrollment 876 906 953 886 890 924 919 884 900 911 Grassy Waters Elementary (2005) Square feet 130,567 124,550 124,550 124,550 124,550 124,550 124,487 124,487 124,487 124,487 Capacity 983 983 983 983 983 983 939 924 967 787 Enrollment 617 668 650 697 724 697 1,002 911 954 950 Greenacres Elementary (1986) (Modernization 2003) Square feet 107,563 107,563 102,183 102,183 102,183 102,183 102,183 99,303 98,343 98,343 Capacity 822 822 822 822 822 822 822 768 750 750 Enrollment 718 711 684 647 668 657 651 629 618 601 Grove Park Elementary (1966) Square feet 105,033 94,284 94,284 102,732 102,732 102,732 101,870 101,870 101,870 101,870 Capacity 954 954 954 954 954 954 875 875 763 763 Enrollment 670 659 632 684 670 733 694 707 722 687 H.L. Johnson Elementary (1984) Square feet 138,266 138,266 138,266 138,266 138,266 138,266 108,815 108,815 108,815 108,815 Capacity 1,000 1,000 1,000 1,000 1,055 1,055 595 595 595 595 Enrollment 796 874 892 894 882 930 925 925 901 920 H.L. Watkins Middle (1962) (Modernization 2005) Square feet 198,663 193,024 193,024 193,024 193,024 197,824 197,824 198,148 210,234 210,234 Capacity 1,252 1,252 1,252 1,000 1,351 1,350 1,350 595 1,343 1,343 Enrollment 863 776 828 904 600 689 803 925 1,034 1,034 Hagen Road Elementary (1967) (Modernization 2008) Square feet 123,115 123,115 123,115 123,115 123,735 122,100 121,828 120,656 86,739 86,739 Capacity 849 849 849 849 930 922 862 598 508 508 Enrollment 669 702 748 835 778 806 696 724 636 673 Hammock Pointe Elementary (1990) (Addition 2005) Square feet 141,603 141,603 141,603 141,603 141,603 141,603 141,603 141,711 141,711 141,711 Capacity 980 980 980 980 980 980 980 980 964 964 Enrollment 886 899 968 837 785 784 794 800 735 806 Heritage Elementary (1994) Square feet 131,309 131,309 121,688 133,880 133,880 133,880 133,880 133,880 125,033 119,273 Capacity 846 846 846 1,080 846 846 846 846 774 738 Enrollment 935 946 1,000 926 893 930 900 833 849 828 Hidden Oaks Elementary (2006) Square feet 136,761 136,761 136,761 136,761 136,761 136,761 136,764 136,764 136,764 129,084 Capacity 1,122 1,122 1,122 1,122 1,122 1,122 1,122 1,122 964 964 Enrollment 715 811 912 883 826 858 829 984 873 681 Highland Elementary (1964) Square feet 138,103 138,103 138,103 138,103 138,647 138,647 138,647 138,572 137,542 137,542 Capacity 1,072 1,072 1,072 1,094 1,120 1,120 1,120 1,120 960 960 Enrollment 979 920 960 831 764 795 723 686 747 778 Hope Centennial Elementary (2009) (06-D) Square feet 123,111 123,111 121,311 123,111 123,111 123,111 0 0 0 0 Capacity 952 952 952 952 1,044 1,092 0 0 0 0 Enrollment 654 635 716 641 603 606 0 0 0 0 Independence Middle (2003) Square feet 192,873 184,458 184,458 184,458 184,458 184,458 182,538 182,538 182,548 178,708 Capacity 1,503 1,503 1,503 1,503 1,503 1,503 1,463 1,195 1,344 1,344 Enrollment 1,324 1,325 1,309 1,308 1,286 1,290 1,282 1,213 1,220 1,315 Indian Pines Elementary (1970) Square feet 138,771 136,265 136,265 136,265 140,666 140,656 140,724 140,724 135,625 156,535 Capacity 1,158 1,158 1,158 1,158 1,184 1,184 1,166 1,130 1,127 648 Enrollment 670 746 758 750 788 856 850 885 899 954 Indian Ridge School (2007) Square feet 76,691 76,691 76,691 76,691 76,691 76,691 76,955 76,775 76,775 0 Capacity 269 269 269 253 253 253 253 253 253 0 Enrollment 112 106 104 95 95 104 104 99 105 0 J.C. Mitchell Elementary (1958) (Modernization 2004) Square feet 137,995 137,995 137,995 137,995 137,995 137,995 137,995 127,887 127,887 127,887 Capacity 1,032 1,032 1,032 1,032 1,122 1,122 1,122 1,122 964 964 Enrollment 813 785 739 716 654 737 709 671 647 603 Source - School District of Palm Beach County Planning Department 172

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA TABLE 29 (Continued) BUILDING INFORMATION LAST TEN FISCAL YEARS (UNAUDITED) Fiscal Year 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 John F. Kennedy Middle (1960) Square feet 189,426 188,925 188,925 188,925 188,925 188,925 189,987 189,987 189,987 161,201 Capacity 1,504 1,504 1,504 1,504 1,504 1,503 1,503 1,503 1,503 1,132 Enrollment 675 867 901 633 688 676 799 961 953 1,011 Jeaga Middle (2004) Square feet 184,984 180,076 180,076 180,076 180,076 180,076 179,776 179,776 179,776 179,776 Capacity 1,245 1,245 1,245 1,245 1,245 1,245 1,254 1,254 1,254 1,254 Enrollment 1,146 1,165 1,180 1,189 1,304 1,189 1,145 1,136 1,176 1,235 Jerry Thomas Elementary (1980) Square feet 130,805 130,805 130,805 130,805 130,805 130,805 132,027 132,027 132,027 81,425 Capacity 1,100 1,100 1,100 1,100 1,100 1,100 1,100 1,100 964 624 Enrollment 844 911 912 857 865 861 834 817 817 847 John I. Leonard High (1999) (Modernization 2006) Square feet 382,733 382,733 382,733 382,733 382,733 382,733 382,733 379,223 379,223 379,223 Capacity 2,903 2,903 2,903 2,903 2,903 2,902 2,902 2,987 2,835 2,676 Enrollment 3,192 2,937 2,968 2,511 2,498 2,277 2,156 2,153 2,091 2,261 Jupiter Elementary (1989) DOE FISH validation Square feet 131,191 119,071 119,071 119,071 119,083 119,083 119,083 119,083 131,515 131,515 Capacity 824 820 820 820 838 838 820 823 746 582 Enrollment 860 831 734 688 691 657 640 634 636 653 Jupiter Middle (1970) FISH Validation Square feet 182,282 199,063 199,063 199,063 199,083 183,961 172,616 160,571 160,571 159,515 Capacity 1,728 1,724 1,724 1,724 1,766 1,779 1,399 1,399 1,190 1,058 Enrollment 1,241 1,167 1,264 1,320 1,382 1,319 1,357 1,217 1,230 1,224 Jupiter High (2001) Square feet 354,416 352,572 352,572 352,572 352,572 352,572 352,572 352,272 352,272 352,272 Capacity 2,765 2,765 2,765 2,765 2,765 2,764 2,643 2,728 2,728 2,703 Enrollment 2,815 2,672 2,800 2,828 2,871 2,974 2,939 2,996 3,038 2,917 Jupiter Farms Elementary (1990) Square feet 94,145 91,958 91,958 93,878 93,878 86,569 88,055 87,777 84,357 84,357 Capacity 677 677 677 677 677 677 677 677 641 641 Enrollment 279 540 539 601 619 639 643 669 708 714 K.E. Cunningham/Canal Point Elem (1987) Square feet 80,868 80,868 80,168 80,168 82,072 82,072 82,072 81,651 81,651 81,651 Capacity 707 707 707 707 707 707 707 707 707 707 Enrollment 279 263 317 314 366 489 505 496 513 510 L.C. Swain Middle (2006) Square feet 192,805 192,805 192,805 192,805 192,805 192,805 192,805 192,661 192,661 192,661 Capacity 1,459 1,459 1,459 1,459 1,459 1,453 1,453 1,453 1,323 1,323 Enrollment 1,208 1,193 1,172 1,073 986 986 949 1,079 1,084 1,154 Lake Park Elementary (1923) (Modernization 2003) Square feet 71,139 74,772 74,620 75,580 75,580 75,580 75,365 76,993 76,993 76,993 Capacity 418 411 411 411 411 411 401 401 401 401 Enrollment 343 326 301 341 353 365 379 387 386 430 Lake Shore Middle (1999) Square feet 207,378 207,378 207,378 207,378 207,378 207,378 207,378 47,855 206,117 206,117 Capacity 1,438 1,438 1,438 1,438 1,438 1,438 1,416 1,416 1,416 1,416 Enrollment 673 743 750 679 714 753 816 820 967 1,082 Lake Worth Middle (1960) Square feet 176,547 172,515 172,515 172,515 172,515 172,515 172,515 189,187 154,482 154,482 Capacity 1,422 1,422 1,422 1,422 1,422 1,422 1,422 1,422 1,077 1,077 Enrollment 1,011 1,022 1,057 935 929 837 794 773 847 930 Lake Worth High (1922) (Modernization 2003) Square feet 331,422 331,422 331,422 331,422 331,422 331,422 331,778 324,462 324,462 307,595 Capacity 2,837 2,837 2,837 2,837 2,837 2,836 2,845 2,931 2,930 2,860 Enrollment 2,478 2,245 2,190 2,108 1,969 1,992 2,060 2,214 2,393 2,818 Lantana Elementary (1968) (Modernization 2004) Square feet 96,394 95,745 95,745 95,745 95,745 95,745 95,220 95,220 100,033 100,033 Capacity 599 599 599 599 647 647 647 647 647 647 Enrollment 490 489 516 437 458 451 457 505 518 549 Lantana Middle (1992) Square feet 161,776 160,218 160,218 160,218 160,250 160,250 160,250 154,851 154,851 154,851 Capacity 1,009 1,009 1,009 1,009 1,001 1,001 1,001 1,001 1,001 1,001 Enrollment 867 851 874 776 788 804 829 808 834 876 Liberty Park Elementary (1965) Square feet 138,068 135,187 135,187 135,187 135,187 135,187 135,162 135,162 135,162 116,273 Capacity 1035 981 981 976 976 966 966 966 966 602 Enrollment 1024 993 1,008 901 859 889 854 821 831 882 Lighthouse Elementary (1985) FISH Validation Square feet 93,644 86,535 86,535 92,654 92,715 92,759 92,759 90,905 90,905 87,065 Capacity 841 841 841 841 841 841 775 775 721 721 Enrollment 699 728 723 827 817 816 792 875 851 831 Source - School District of Palm Beach County Planning Department 173

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA TABLE 29 (Continued) BUILDING INFORMATION LAST TEN FISCAL YEARS (UNAUDITED) Fiscal Year 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 Limestone Creek Elementary (1965) Square feet 137,750 130,346 130,346 134,762 134,762 134,762 134,762 135,643 142,419 94,826 Capacity 1,058 1,058 1,058 1,058 1,058 1,058 1,018 1,018 963 633 Enrollment 913 943 920 832 787 763 739 836 861 927 Lincoln Elementary (1988) Square feet 163,261 163,261 163,261 165,165 165,165 165,165 165,165 165,165 165,165 165,165 Capacity 968 968 968 968 968 968 1,182 1,227 1,227 1,227 Enrollment 556 511 511 472 444 445 420 406 454 500 Loggers Run Middle (1981) Square feet 124,233 124,233 124,233 135,537 135,537 135,315 135,315 134,002 134,002 134,002 Capacity 1,045 1,045 1,045 1,045 1,045 964 964 964 1,030 964 Enrollment 1,082 1,049 992 1,057 1,109 1,162 1,082 1,065 1,022 1,157 Loxahatchee Groves Elementary (1985) Square feet 110,048 110,048 110,048 110,048 110,048 110,048 110,048 107,008 107,008 105,168 Capacity 860 860 860 860 860 860 716 716 628 574 Enrollment 465 474 475 518 519 639 660 665 650 666 Manatee Elementary (1985) Addition in 2011 Square feet 172,260 178,980 178,980 178,980 185,732 131,704 127,514 127,514 127,514 122,714 Capacity 1,531 1,585 1,747 1,747 1,747 1,080 1,080 1,180 1,188 1,026 Enrollment 1,094 1,030 1,062 1,044 1,036 1,118 1,141 1,169 1,172 1,164 Marsh Pointe Elementary (2007) 03-X Square feet 115,984 115,984 115,984 115,984 115,984 115,984 110,895 110,895 110,895 0 Capacity 1,022 1,022 1,022 1,022 1,022 1,022 960 970 970 0 Enrollment 938 915 845 808 714 589 483 450 745 0 Meadow Park Elementary (1955) (Modernization 2004) Square feet 115,435 115,435 113,725 113,725 113,728 113,728 114,231 114,231 200,941 200,941 Capacity 672 672 672 672 878 878 878 1,080 689 689 Enrollment 584 596 544 571 571 690 682 565 584 572 Melaleuca Elementary (1966) Square feet 92,608 92,608 87,539 87,539 90,059 90,059 90,059 87,625 87,625 87,625 Capacity 964 964 964 964 964 964 964 964 891 891 Enrollment 799 783 750 828 812 827 822 793 943 745 Morikami Park Elementary (1997) Square feet 109,837 109,837 109,837 109,837 109,837 109,837 109,837 108,262 105,812 105,812 Capacity 844 844 844 794 844 844 844 844 844 772 Enrollment 790 802 795 812 829 845 876 923 957 1,006 New Horizons Elementary (1985) Square feet 89,542 91,230 91,230 93,302 93,302 95,382 95,382 95,401 94,420 94,420 Capacity 749 749 749 749 749 749 749 749 749 749 Enrollment 593 591 648 572 592 628 656 691 707 846 North Grade Elementary (1999) Square feet 118,820 113,426 119,186 119,186 115,346 115,346 115,346 115,346 111,815 110,855 Capacity 784 784 784 730 741 741 741 741 921 723 Enrollment 772 779 751 770 763 745 788 753 768 778 The Conservatory at North Palm Beach Elementary (1958) Square feet 116,739 32,248 32,248 80,263 80,263 80,263 80,119 80,119 79,959 79,959 Capacity 745 239 180 676 676 676 676 676 676 676 Enrollment 538 415 383 396 434 461 475 536 546 531 Northboro Elementary (1921) (Modernization 2010) Square feet 123,968 125,775 125,775 125,775 125,775 125,775 38,962 0 96,825 96,825 Capacity 970 970 970 970 988 720 720 720 720 720 Enrollment 657 643 628 627 634 632 727 663 665 713 Northmore Elementary (1991) Square feet 95,673 95,673 95,673 104,313 104,313 104,313 104,193 103,566 103,566 103,566 Capacity 637 637 637 637 637 637 637 637 637 637 Enrollment 452 485 435 487 480 501 493 516 545 538 Odyssey Middle (2000) Square feet 197,505 197,505 187,533 187,533 187,533 187,533 186,345 186,305 186,305 186,305 Capacity 1,490 1,490 1,490 1,490 1,490 1,489 1,489 1,489 1,489 1,489 Enrollment 828 911 1,045 1,003 1,045 1,078 1,139 1,061 1,070 1,100 Okeeheelee Middle (1965) Square feet 178,042 178,042 178,042 183,952 184,744 184,760 184,760 207,256 207,256 193,290 Capacity 1,614 1,614 1,614 1,614 1,574 1,571 1,571 1,710 1,258 1,087 Enrollment 1,402 1,441 1,454 1,413 1,344 1,309 1,245 1,145 1,195 1,212 Olympic Heights High (1990) Square feet 366,496 366,496 366,496 366,496 366,496 366,496 362,034 361,823 363,078 363,078 Capacity 2,271 2,271 2,271 2,271 2,271 2,268 2,289 2,393 2,393 2,393 Enrollment 1,996 1,943 1,922 2,076 1,901 1,917 1,680 1,513 1,486 1,464 Omni Middle (1989) Square feet 168,085 168,085 168,085 168,085 168,085 168,085 168,085 166,880 163,912 163,912 Capacity 1,396 1,396 1,396 1,396 1,396 1,396 1,396 1,396 1,256 1,256 Enrollment 1,444 1,406 1,442 1,567 1,581 1,400 1,431 1,254 1,266 1,239 Source - School District of Palm Beach County Planning Department 174

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA TABLE 29 (Continued) BUILDING INFORMATION LAST TEN FISCAL YEARS (UNAUDITED) Fiscal Year 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 Orchard View Elementary (1994) Square feet 115,617 115,617 115,713 115,713 115,713 115,713 113,953 112,033 108,925 108,925 Capacity 800 800 800 800 800 800 764 764 764 764 Enrollment 594 618 559 576 642 627 614 617 590 654 Osceola Creek Middle (2006) Square feet 171,771 171,771 170,721 170,721 170,721 170,721 169,322 169,322 169,322 169,322 Capacity 1,075 1,075 1,075 1,075 1,075 1,067 1,067 1,067 1,067 1,067 Enrollment 634 607 607 840 865 917 846 879 853 870 Pahokee Elementary (K-6) (1985) Square feet 81,140 81,140 81,140 84,020 84,020 84,020 84,020 90,166 91,206 91,206 Capacity 671 671 671 671 671 725 671 671 671 671 Enrollment 359 376 333 357 347 456 496 507 544 526 Pahokee Mid/Sr. (1970) (Modernization 2010) Square feet 319,787 319,787 306,692 306,765 319,822 310,609 198,413 200,723 201,879 201,879 Capacity 1,950 1,950 1,953 1,971 1,971 1,151 1,151 1,214 1,205 1,205 Enrollment 811 823 853 950 1,035 877 915 950 956 896 Palm Beach Central High (2004) Square feet 395,877 395,877 388,257 388,257 388,257 388,163 388,163 389,022 381,470 381,470 Capacity 2,754 2,754 2,754 2,754 2,754 2,753 2,777 2,862 2,459 2,459 Enrollment 2,894 2,856 2,921 2,867 2,880 2,933 2,890 2,687 2,598 2,428 Palm Beach Gardens ES (1962) (Modernization 2008) Square feet 111,459 111,459 111,459 111,459 111,459 111,459 109,426 109,509 63,815 63,815 Capacity 739 739 739 739 770 770 770 552 552 552 Enrollment 709 732 689 661 600 571 533 496 539 584 Palm Beach Gardens High (1965) (Modernization 2010) Square feet 379,095 379,095 379,095 379,095 379,095 378,775 340,849 340,849 340,849 340,849 Capacity 2,852 2,852 2,852 2,852 2,843 2,979 2,635 2,909 2,766 2,766 Enrollment 2,604 2,505 2,539 2,537 2,562 2,578 2,416 2,602 2,643 2,601 Palm Beach Lakes High (1986) Square feet 411,424 405,655 405,655 407,383 407,383 410,839 410,495 375,414 331,732 331,732 Capacity 2,750 2,750 2,750 2,750 2,921 2,921 2,213 2,287 2,286 2,287 Enrollment 2,019 1,886 2,071 1,694 1,923 1,999 1,839 2,166 2,234 2,250 Palm Beach Public School (1921) (Modernization 2006) Square feet 68,595 68,595 68,595 68,595 68,574 68,574 68,574 68,565 68,565 90,264 Capacity 393 393 393 393 393 383 383 383 383 497 Enrollment 406 413 402 378 415 478 451 468 409 326 Palm Springs Elementary (1988) Square feet 140,281 140,281 140,281 140,281 134,648 134,648 134,648 134,648 134,648 127,928 Capacity 1,012 1,012 1,012 1,023 1,023 1,023 1,013 1,031 925 799 Enrollment 850 888 896 881 896 856 883 824 832 799 Palm Springs Middle (2006) (formerly named Jeff Davis 1968) Square feet 212,472 212,472 212,472 212,472 212,472 212,472 212,472 212,472 212,472 238,260 Capacity 1,704 1,704 1,704 1,704 1,704 1,699 1,695 1,695 1,404 1,394 Enrollment 1,535 1,635 1,650 1,514 1,530 1,569 1,664 1,560 1,417 1,355 Palmetto Elementary (1989) Square feet 125,940 125,940 125,544 124,584 125,544 125,544 125,486 125,486 124,526 124,526 Capacity 882 882 882 882 882 864 864 936 918 918 Enrollment 580 583 555 613 624 590 579 602 620 703 Panther Run Elementary (1965) Square feet 130,092 130,092 130,092 130,092 130,092 130,092 130,092 126,654 126,654 109,946 Capacity 978 978 978 978 978 978 978 978 978 602 Enrollment 638 660 704 759 720 783 814 766 825 973 Park Vista High (2005) Square feet 428,411 428,411 428,411 428,411 428,411 433,211 424,224 424,224 400,952 400,952 Capacity 3,150 3,150 3,150 3,150 3,150 3,269 3,269 2,879 2,762 2,562 Enrollment 2,967 2,892 2,904 2,888 2,938 2,913 3,157 3,320 3,134 2,839 Pierce Hammock Elementary (2005) Square feet 122,505 122,505 121,773 121,773 121,773 121,773 121,773 120,813 120,813 120,813 Capacity 808 808 808 808 808 808 808 790 790 790 Enrollment 523 563 577 620 679 695 701 712 681 657 Pine Grove Elementary (1966) Square feet 86,483 86,483 83,331 94,771 98,755 98,755 98,015 98,015 98,015 98,015 Capacity 654 654 654 654 654 654 654 674 674 674 Enrollment 393 413 467 462 452 447 448 457 498 548 Pine Jog Elementary (2008) 03-Y Square feet 125,990 125,990 125,990 125,991 125,991 125,991 125,991 125,855 0 0 Capacity 974 974 967 982 988 988 1,034 960 0 0 Enrollment 953 910 948 850 810 757 630 433 0 0 Pioneer Park Elementary (1995) Square feet 102,411 102,411 102,411 102,411 102,411 102,411 102,411 102,411 102,411 102,411 Capacity 800 800 800 800 800 800 800 800 800 800 Enrollment 291 375 326 374 373 364 405 451 466 489 Source - School District of Palm Beach County Planning Department 175

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA TABLE 29 (Continued) BUILDING INFORMATION LAST TEN FISCAL YEARS (UNAUDITED) Fiscal Year 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 Pleasant City Elementary (2003) Square feet 69,462 69,462 69,462 69,462 69,462 69,462 69,718 69,718 69,718 69,718 Capacity 386 386 386 386 386 386 386 386 386 386 Enrollment 368 307 260 231 281 315 342 265 302 326 Plumosa Elementary (1954) (new site only 2013) Square feet 169,344 169,344 169,344 241,618 242,658 73,133 73,813 73,813 73,813 73,813 Capacity 711 711 711 733 733 621 581 581 581 581 Enrollment 617 601 593 559 498 468 478 387 374 386 Poinciana Elementary (1956) Square feet 96,907 96,907 96,907 96,907 96,907 96,907 96,807 96,807 96,807 96,807 Capacity 685 685 685 685 685 685 685 685 685 685 Enrollment 536 521 528 529 528 539 557 561 562 627 Polo Park Middle (1993) Square feet 191,769 191,769 191,769 187,601 187,601 187,601 197,679 196,387 197,347 200,803 Capacity 1,451 1,451 1,451 1,451 1,451 1,599 1,619 1,639 1,648 1,560 Enrollment 850 836 864 1,088 1,148 1,127 1,086 1,048 1,598 1,656 Riviera Beach Preparatory (1967) (RFS moved to site in 2011 & Inlet Grove moved to Old Suncoast) Square feet 113,291 113,291 113,291 122,878 122,878 123,962 123,962 137,927 129,577 135,533 Capacity 581 484 484 706 706 792 803 851 617 819 Enrollment 151 153 133 135 114 Rolling Green Elementary (1995) Square feet 146,744 146,744 146,744 146,744 146,744 146,744 146,915 146,915 146,915 30,228 Capacity 1,109 1,109 1,109 1,109 1,122 1,122 1,122 1,174 964 726 Enrollment 798 769 702 790 699 727 670 721 684 795 Roosevelt Elementary (1996) Square feet 117,695 117,695 117,695 117,695 117,695 119,615 119,615 119,615 119,615 119,615 Capacity 801 801 801 801 801 786 786 786 748 748 Enrollment 456 457 406 461 461 429 438 475 571 569 Roosevelt Middle (1993) Square feet 212,814 212,814 212,814 212,814 212,814 212,814 189,380 189,380 189,367 186,487 Capacity 1,552 1,547 1,547 1,547 1,547 1,551 1,168 1,209 1,175 1,106 Enrollment 1,068 1,114 1,097 1,231 1,198 1,213 1,222 1,246 1,360 1,317 Rosenwald Elementary (1951) Modernization 2015 Square feet 65,004 10,194 80,219 81,083 83,675 78,770 78,725 78,725 78,725 79,589 Capacity 328 0 543 543 543 543 543 543 543 543 Enrollment 258 243 206 222 223 234 268 287 333 351 Royal Palm Beach Elementary (2001) Square feet 104,677 104,677 104,677 108,517 108,517 108,517 341,192 108,517 106,450 106,450 Capacity 774 774 774 774 846 846 846 846 846 846 Enrollment 630 636 657 715 735 738 781 828 858 888 Royal Palm Beach High (1996) Square feet 323,912 323,912 323,912 341,192 341,192 341,192 108,517 339,131 333,803 333,803 Capacity 2,194 2,194 2,194 2,194 2,194 2,192 2,192 2,259 2,259 2,259 Enrollment 2,186 2,209 2,206 2,079 2,062 2,177 2,207 2,301 2,322 2,538 Royal Palm School (1959) Modernization 2009) Square feet 147,481 147,481 147,481 147,481 147,481 147,481 164,761 160,279 114,355 116,100 Capacity 623 623 623 623 623 623 814 626 601 611 Enrollment 494 213 201 190 198 180 173 191 207 205 S.D. Spady Elementary (1990) ( Modernization 2005) Square feet 91371 91,371 91,371 91,371 91,371 91,371 89,243 89,243 89,243 89,243 Capacity 697 697 697 697 697 697 697 697 697 697 Enrollment 532 527 555 546 562 672 651 555 539 561 Sandpiper Shores Elementary (1970) Square feet 116,612 116,612 116,612 116,612 116,612 116,612 116,612 115,865 99,167 99,167 Capacity 1,064 1,064 1,064 1,064 1,116 1,116 1,096 1,168 698 698 Enrollment 887 799 755 772 774 737 684 709 725 757 Santaluces High (1965) (Addition 2005) Square feet 360,117 352,652 356,649 356,649 360,137 360,137 360,137 356,828 356,828 357,521 Capacity 2,322 2,322 2,221 2,221 2,221 2,221 2,221 2,281 2,365 2,294 Enrollment 2,415 2,350 2,367 2,305 2,233 2,323 2,343 2,341 2,139 2,162 Seminole Ridge High (2006) Square feet 382,147 382,147 380,092 380,092 380,092 380,092 378,172 377,412 376,677 376,677 Capacity 2,463 2,463 2,463 2,463 2,452 2,409 2,409 2,494 2,470 2,470 Enrollment 2,351 2,415 2,359 2,558 2,504 2,425 2,483 2,398 2,361 1,857 Seminole Trails Elementary (1965) Square feet 137,032 137,032 137,032 137,032 137,032 163,368 115,462 117,542 117,542 117,542 Capacity 1,066 1,066 1,066 1,066 1,158 626 626 626 662 662 Enrollment 803 724 730 946 923 806 843 785 799 968 South Grade Elementary (1926) ( Modernization 1999) Square feet 99,413 99,413 99,413 102,869 102,869 102,869 102,999 102,999 102,999 100,455 Capacity 715 715 715 715 715 715 719 719 755 611 Enrollment 705 655 646 542 523 504 723 760 787 789 Source - School District of Palm Beach County Planning Department 176

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA TABLE 29 (Continued) BUILDING INFORMATION LAST TEN FISCAL YEARS (UNAUDITED) Fiscal Year 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 South Intensive Transition (1965) Square feet 13,635 13,635 13,635 33,051 33,051 32,118 32,118 32,118 29,418 32,118 Capacity 20 20 20 318 318 372 372 372 392 392 Enrollment 69 65 84 81 83 115 71 90 130 130 South Olive Elementary (1988) Square feet 99372 97,302 97,302 101,142 99,222 99,222 99,222 98,822 98,822 98,822 Capacity 637 637 637 601 618 608 626 626 644 626 Enrollment 697 706 693 671 636 603 631 634 653 684 Spanish River High (1965) Square feet 335,096 335,096 335,096 338,957 345,341 345,341 345,341 345,500 322,425 322,425 Capacity 2,259 2,259 2,259 2,242 2,240 2,239 2,239 2,248 2,229 2,229 Enrollment 2,356 2,336 2,376 2,381 2,288 2,227 2,149 2,135 2,106 2,190 Starlight Cove Elementary (1988) Square feet 129,663 128,790 128,790 128,790 128,790 128,790 128,431 128,431 128,431 109,091 Capacity 1,086 1,086 1,086 1,086 1,112 1,112 1,112 1,112 1,035 756 Enrollment 847 911 961 741 733 738 770 790 786 752 Suncoast High (1955) (Modernization 2011) Square feet 294,344 294,344 294,344 294,344 294,344 177,870 178,365 178,365 178,365 178,365 Capacity 1,733 1,733 1,733 1,733 1,811 1,269 1,269 1,350 1,330 1,130 Enrollment 1,505 1,486 1,500 1,510 1,445 1,391 1,327 1,328 1,296 1,316 Sunrise Park Elementary (2000) Square feet 121,509 121,509 121,509 134,949 134,949 134,949 134,949 134,994 131,154 124,434 Capacity 972 972 972 972 972 972 972 900 864 774 Enrollment 854 867 880 894 985 1,004 1,057 1,056 1,049 1,049 Sunset Palm Elementary(2008) Square feet 127,106 127,106 127,106 127,106 127,106 127,106 127,106 127,035 0 0 Capacity 978 978 978 978 978 978 990 960 0 0 Enrollment 1,034 986 995 953 996 913 766 768 0 0 Timber Trace Elementary (1990) Square feet 114,808 114,841 114,841 114,841 114,841 114,841 114,841 114,841 109,938 109,884 Capacity 1,013 1,001 1,001 1,001 1,001 1,001 1,001 1,001 991 991 Enrollment 860 935 847 866 859 838 833 972 913 916 Tradewinds Middle (2005) Square feet 192,126 192,066 192,066 192,066 192,066 192,066 191,938 191,938 191,938 191,938 Capacity 1,245 1,245 1,245 1,245 1,245 1,220 1,220 1,220 1,231 1,121 Enrollment 1,152 1,189 1,235 1,214 1,232 1,182 1,179 1,218 1,164 1,262 Turning Points Academy (2007) Square feet 71,047 71,047 71,047 71,047 71,047 71,047 71,047 69,402 69,402 0 Capacity 820 820 820 818 818 818 818 818 818 0 Enrollment 125 102 126 127 185 250 250 250 400 0 U.B. Kinsey/Palmview Elementary (1932) (Modernization 2004) Square feet 104,577 104,577 104,577 104,577 104,577 104,577 104,462 104,462 103,277 101,357 Capacity 700 700 700 700 700 695 695 695 713 659 Enrollment 549 559 516 515 507 514 557 550 568 602 Verde Elementary (1980) Square feet 109,513 109,513 104,581 105,349 105,589 105,589 105,250 105,250 103,330 103,330 Capacity 926 926 838 806 806 806 806 770 770 698 Enrollment 901 847 823 855 825 791 759 762 757 786 Village Academy (1999) Square feet 176,884 176,884 176,884 181,264 181,264 181,290 183,024 183,024 183,024 102,389 Capacity 1,083 1,083 1,083 1,303 599 541 1,302 1,721 657 657 Enrollment 731 746 788 763 788 420 693 440 591 534 Washington Elementary (1964) Square feet 70,005 70,005 70,005 74,229 77,861 77,861 77,514 77,514 77,514 77,514 Capacity 484 484 484 484 484 484 484 484 484 484 Enrollment 370 380 309 334 334 342 397 397 435 500 Waters Edge Elementary (1985) Square feet 110,031 110,031 109,995 115,695 116,559 115,671 115,671 115,741 115,741 115,741 Capacity 818 818 818 818 818 746 746 764 764 764 Enrollment 782 811 791 841 836 855 833 879 961 1,046 Watson B. Duncan Middle (1960) Square feet 164,235 156,217 156,217 160,731 160,731 160,731 160,731 161,904 162,768 162,768 Capacity 1,369 1,358 1,358 1,378 1,378 1,377 1,065 1,065 1,065 1,065 Enrollment 1,275 1,311 1,301 1,381 1,258 1,178 1,163 1,170 1,180 1,209 Wellington High (1965) Square feet 342,878 348,110 342,878 357,064 360,312 360,312 360,312 360,194 330,559 330,559 Capacity 2,297 2,297 2,297 2,297 2,297 2,297 2,193 2,278 2,278 2,278 Enrollment 2,380 2,346 2,417 2,428 2,306 2,188 2,149 2,226 2,348 2,593 Wellington Elementary (1970) Square feet 118,684 118,684 118,684 118,684 118,684 123,484 119,007 119,007 119,833 119,833 Capacity 1,022 1,022 1,022 1,022 1,061 1,439 1,032 1,076 770 770 Enrollment 664 710 732 813 758 835 834 874 901 925 Source - School District of Palm Beach County Planning Department 177

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA TABLE 29 (Concluded) BUILDING INFORMATION LAST TEN FISCAL YEARS (UNAUDITED) Fiscal Year 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 Wellington Landings Middle (1970) Square feet 187,542 187,542 178,806 181,290 181,339 190,130 174,179 179,475 179,475 195,987 Capacity 1,610 1,610 1,610 1,610 1,610 1,391 1,391 1,391 1,174 1,471 Enrollment 1,032 1,117 1,110 1,292 1,264 1,221 1,138 1,098 1,066 1,161 West Boca Community High (2005) Square feet 373,319 373,319 373,319 373,007 373,007 373,007 373,049 373,049 371,432 371,432 Capacity 2,315 2,315 2,315 2,315 2,315 2,315 2,315 2,420 2,500 2,500 Enrollment 1,968 2,054 2,065 2,216 2,101 2,107 2,165 2,250 2,249 2,155 West Gate Elementary (2001) Square feet 114,859 118,783 125,479 125,479 125,479 134,119 134,119 134,355 134,355 130,515 Capacity 734 734 734 734 734 896 896 896 824 734 Enrollment 711 721 719 764 781 792 1,078 1,026 1,046 979 West Riviera Elementary (1966) Square feet 82,391 82,391 82,391 82,391 89,607 89,607 89,607 89,607 89,607 89,607 Capacity 729 729 729 734 734 734 752 752 752 752 Enrollment 656 671 571 500 550 621 602 611 620 517 Western Pines Middle (1970) Square feet 143,361 143,361 143,361 152,432 158,368 152,637 151,020 151,020 151,020 151,020 Capacity 1,054 1,054 1,054 1,054 1,094 1,091 1,091 1,091 1,091 1,091 Enrollment 1,052 1,100 1,150 1,190 1,193 1,148 1,192 1,230 1,305 1,364 Westward ES (1961) (Modernization 2008) Square feet 119,796 119,796 119,796 119,796 119,914 119,914 119,914 113,709 74,785 85,009 Capacity 890 890 890 1,014 1,040 1,040 1,040 661 661 661 Enrollment 578 664 699 654 676 638 617 563 518 598 Whispering Pines Elementary (1984) Square feet 135,474 135,474 135,474 139,314 111,605 111,605 111,130 101,519 97,679 97,679 Capacity 932 932 932 642 666 609 609 609 609 609 Enrollment 852 823 787 594 570 544 568 577 617 618 William T. Dwyer High (1960) Square feet 368,559 358,719 358,719 360,447 360,447 360,447 355,126 355,126 359,830 331,073 Capacity 2,456 2,456 2,456 2,456 2,475 2,476 2,481 2,567 2,347 1,901 Enrollment 2,000 2,031 1,974 2,348 2,283 2,198 1,893 1,788 1,869 1,975 Woodlands Community Middle (1998) Square feet 200,699 200,699 187,385 196,985 197,849 217,335 198,311 196,969 197,761 197,761 Capacity 1,411 1,411 1,411 1,411 1,411 1,211 1,211 1,211 1,211 1,211 Enrollment 1,145 1,199 1,264 1,219 1,246 1,317 1,281 1,257 1,568 1,592 Wynnebrook Elementary (1966) Square feet 88,103 88,103 88,103 92,231 98,471 98,471 98,311 98,311 91,359 86,559 Capacity 861 861 861 861 861 861 861 861 781 781 Enrollment 835 849 835 835 823 801 830 844 797 845 Source - School District of Palm Beach County Planning Department 178

THE SCHOOL DISTRICT OF PALM BEACH COUNTY, FLORIDA TABLE 30 MISCELLANEOUS STATISTICAL DATA (UNAUDITED) PALM BEACH COUNTY (INCORPORATED - 1909) County Seat West Palm Beach Geographic area 2,578 square miles Climate Average temperature 75.4 degrees F Average high 82.9 degrees F Average low 67.8 degrees F Average rainfall (per month) 5.2 inches Number of Public Schools Elementary 107 Junior High and Middle Schools 33 High Schools 23 Special Schools 20 * Total 183 Communications Major newspapers: Major television stations: Telephone service: Palm Beach Post Sun Sentinel WPTV - 5 (NBC) WPEC - 12 (CBS) WPBF - 25 (ABC) WFLX - 29 (FOX) AT&T Colleges/Universities Colleges Universities Palm Beach State College Florida Atlantic University Barry University (Private) Palm Beach Atlantic University (Private Christian) Keiser University (Private) Lynn University (Private) Transportation Airports Seaport Railroad - Passenger Railroad - Freight Bus - Interstate/Intrastate Bus - Local Palm Beach International Airport Palm Beach County Park Airport (Lantana) North County General Aviation Airport Boca Raton Airport Glades Airport Port of Palm Beach Amtrak Tri-Rail Florida East Coast Railway CSX Corporation Greyhound/Trailways Bus Lines Palm Tran Source: Palm Beach County Development Board Palm Beach County, Department of Public Affairs www.usclimatedata.com * Includes 13 Alternative, one virtual, one K-12, one Intermediate, two adult education, and two ESE Schools. Five Alt. Schools are located in District Buildings 179